When to Buy a Fake

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.