Over time I also found myself wanting things I didn’t even know I wanted. I’d never worn a watch, and yet I found myself obsessively researching them. I’d noticed that when I met other wealthy businesspeople, they’d often discuss their watches and show them off. I didn’t get it. I had a phone, which told the time down to the millisecond—why did I n

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A luxury good is one where the price paid is much higher than the apparent utility it offers. We pay extra precisely because it’s not a good value. The utility lies in how we and our peers think about it. The scarcity and bling of a luxury good are used to increase our status (in our own eyes and those in our cohort).