Conspicuous Consumption in the Model of Monopolistic Competition

The essence of the modern society was described in the middle of 20th century as «consumer society» in which not only the structure of consumption but the motivations for good purchase change alongside with the increase of incomes and the rising rapidly up the social ladder. Person within the consumer society aims at being «not worse than others» and «standing out from the crowd» at the same time, what defines the striking phenomenon of conspicuous consumption. This research study focuses on the theoretical and empirical examination of the phenomenon of conspicuous consumption in the context of the monopolistic competition model, dividing the consumers into snobs and conformists. Theoretical analysis consists in modeling of the behavior of the defined types of the customers within the CES function. Then empirical investigation in the form of a questionnaire is conducted to provide support for the theoretical outcomes. The compiled questionnaire is aimed at the citizens of Nizhniy Novgorod in order to identify the types and characteristics of the consumers in the real market.