In my past Blog posts, I have advocated the virtues of
buying fake instead of real stuff. In the following I further elaborate on my
advice.
Let me start with an equation:
Price you pay =
Intrinsic Value + Bragging value
Intrinsic value equals the value of function the item
performs or the real pleasure it provides. Bragging value is the pleasure you
get by showing off what you purchased (primarily the pleasure of causing envy).
The way to find the intrinsic value is to estimate what you would have paid for
the item if you could not show it to anyone or talk about it, thereby rendering
the bragging value to zero.
Next, let us consider four examples and see how these values
play out, and what would be the difference in purchasing the real thing
compared to a fake.
An expensive watch certainly has a lot of bragging value.
However, it also has a higher intrinsic value than a fake one because it might
last longer and require fewer repairs.
Similarly, Jewelry provides some intrinsic value because of
the pleasure it brings by enhancing the beauty of a woman. Also, the material
used in creating real jewelry is intrinsically more valuable than a fake one. However,
it does have a lot of bragging value, and there is high probability that it
will not be purchase it if it cannot be shown to others (and make them
jealous).
A “classical” painting has some intrinsic value, in that it
brings pleasure to our senses. Why does that happen is not something I fully
understand, but it does happen. However, a fake painting will provide the same
intrinsic value as the real one, which, done by a well-known artist, has a huge
bragging value.
Finally, in my opinion, an abstract painting has practically
no intrinsic value. Seeing a canvas with just color blue (yes, I am not making
this up) does not do anything for me. However, even this, if done by a well-known
artist (a conman?) has high bragging value, at least among people who are in
that circle.
All this is shown in a figure below. It shows both the intrinsic and bragging
values of the four objects I talked about. In addition, I have shown what
happens if a fake is purchased instead of real one.
My advice on when to buy a fake is based on my feeling that
for an object that has higher bragging value than the intrinsic one, there is
no point in spending the extra money. Besides, to get the bragging value, it
has to be shown to the others and the others have to be convinced that what you
have is real and not fake. This is a very
risky proposition. I would not take the risk if most of what I spent was for
buying the bragging value that may or may not materialize. Finally, for
some things the intrinsic value is so small, it may not make sense to buy even
a fake one. The “blue canvas” abstract comes to mind.
So, there you have it. Just keep my chart handy when you
have to make a major decision on buying something.
PS: Of course, I am not including the investment value in my
treatise. I know that many people in the world will ignore my advice and keep
paying increasingly higher dollars for the stuff that has a high bragging
value, thereby making it a sound investment.
