[jtkung]

Veblen goods are defined as normally luxury items where an increase in price actually increases demand. The high price makes the goods desirable as status symbols, by way of conspicuous consumption and conspicuous leisure; conversely, a decrease of the prices of Veblen goods would decrease demand for the products.

I believe there are a few guitar makers who fall into this category. A few parameters that are modified to get these products into the Veblen category:

• Long waiting lists to create rarity and a sense of increased demand with limited supply
  
• Excess bling using rare materials
  
• Endorsements to allow increase in pricing
  
• Association with luxury
  

A few luthiers who I think meet these criteria (guitars priced > $20K USD)

• Olson
  
• Somogyi
  
• Kostal
  
• Traugott
  
• Manzer
  
• Parker
  

Some are justifiably high due to their tone, but it would be great to compare these guitars (looking at playability and tone) in a complete double-blind test compared guitars of much lower price but potentially equal in tonal quality and playability.  I am inclined to believe that the high prices are more often due to luxury perception (Veblen good) as opposed to true superiority in product. When we hear with our eyes and wallet -- it becomes apparent that the product we are looking at is a Veblen good.