Then he told me, “These are those who come from the great tribulation, and they’ve washed their robes, scrubbed them clean in the blood of the Lamb. That’s why they’re standing before God’s Throne. They serve him day and night in his Temple. The One on the Throne will pitch his tent there for them: no more hunger, no more thirst, no more scorching heat. The Lamb on the Throne will shepherd them, will lead them to spring waters of Life. And God will wipe every last tear from their eyes.”
The evidence for this hypothesis comes from an almost innumerable number of economic interactions. A few examples: When Ian and I went to buy speakers, we listened to some really dazzling specimens, speakers that sounded fantastic, and cost around $3,000 for a pair. We loved the sound, yes, but when we compared that to the speakers that cost $1,500 for a pair, we couldn’t say that the quality of sound doubled for the first pair of speakers. Yes, we did end up purchasing the $1,500 speakers, and they sound wonderful to us compared to the old off-brand ones I had rescued from a boom-box I bought in high school that we used until that point. That jump marked a significant increase in price, but also a really marked increase in quality, too. The jump from the $1,500 speakers to the $3,000 speakers, however, did not justify the increase in price.
Similarly, imagine a name-brand handbag. This handbag could cost $1,000, and it will probably have a fancy logo printed all over it. Alternatively, you could buy a knock-off handbag for $25, made in the same factory as its name-brand cousin, with the same look and quality. What’re you paying for? Status. You aren’t actually receiving a better handbag when you plunk down a grand for one. Now, I did pay $100 for a custom hand-made Timbuk2 bike bag (waterproof and very stylish). This bag was a huge step in quality above the free backpack I had used before, and well worth the price. This purchase rated somewhere on the right-hand third of the graph, when the price gets steep but the quality also increases significantly. However, after a certain point you’ll simply pay more money but won’t actually receive a significantly higher-quality product.
Or take the example of store-brand food versus brand-name food. If you buy a box of Quaker Instant Oatmeal packets, is that worth the extra $2 compared to the Store X Brand oatmeal packets? Probably, once again, your palate will not detect a significant difference between the two oatmeals. In your mind, however, Quaker is THE authority in oatmeal. Brand loyalty draws you back, despite the fact that you’re hovering near the oatmeal quality asymptote. I’m not arguing that it’s a waste to pay more for some things: I buy Vermont Morning organic oatmeal, which costs about $5 for 11 ½-cup servings, because it really does taste better than Quaker instant. It contains crunchy kernels of oat and wheat that I like, as well as lots of fiber and a remarkable amount of protein. I’m saying that, within a specific product category, you’ll keep paying more without receiving a corresponding increase in quality.
You can almost always pay more money for an object, but after a certain point, you simply aren’t getting an increase proportional to how much more you’ve paid. Naturally, every product will have a different asymptote. It’s probably worth paying more for a ViewSonic monitor rather than cheaping out and having to replace the cheapo one six months later. The trick is to know when you’ve reached the point after which you simply keep paying more without receiving higher quality.
I’m sure somebody nerdier than I would be able to come up with a mathematical formula for this hypothesis. I will leave it to them.
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