Most status games are positive-sum

Robert Frank complains about status games:

To celebrate their daughter’s 13th birthday, for example, Amber Ridinger’s parents bought her a $27,000 Dolce & Gabbana gown and hired JaRule, Ashanti and other popular entertainers to provide live music at her party in Miami last month.

David H. Brooks, the chief executive of a company that supplies body armor to the American military in Iraq, invited 150 of his daughter’s friends to the Rainbow Room atop Rockefeller Center in Manhattan, where they were serenaded by 50 Cent, Don Henley, Stevie Nicks and other luminaries during a birthday party reported to have cost $10 million.

Although these events have prompted much finger wagging by social critics, the parents involved are not behaving abnormally. They are merely spending their own money in an effort to provide a special occasion for their daughters. For a party to be special, however, it must somehow stand out from other parties that define the norm. Here, too, the problem is that expensive birthday parties have become a growth industry.

Kevin and Danya Mondell, founders of Oogles-n-Googles, a company described as an over-the-top event planner for children’s parties, recently announced their intention to license Oogles-n-Googles franchises. Yet no matter how much parents spend, the number of parties that achieve special status will be no greater than when everyone spent much less.

My take: Can’t every party be memorable in a different way?  Seeing Roger McGuinn perform has not detracted from my memories of seeing Paul McCartney or for that matter seeing Vladimir Horowitz.  Why should parties — or other status objects for that matter — be so different?  In many cases good experiences can even complement each other, rather than detract.  Let us also remember that status games encourage people to earn more income, and thus to partially offset the distortionary effect of taxes on labor supply.


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