Abstract: Drawing from costly signaling theory, we predicted that luxury consumption enhances status and produces benefits in social interactions. Across seven experiments, displays of luxury — manipulated through brand labels on clothes — elicited different kinds of preferential treatment, which even resulted in financial benefits to people who engaged in conspicuous consumption. Furthermore, we tested preconditions in which the beneficial consequences of conspicuous consumption may arise and determined the proximate mechanisms underlying them. The present data suggest that luxury consumption can be a profitable social strategy because conspicuous displays of luxury qualify as a costly signaling trait that elicits status-dependent favorable treatment in human social interactions.
Keywords: conspicuous consumption, costly signaling theory, status, consumer behavior, social interactions