A Generative Model of Conspicuous Consumption and Status Signaling

2026-03-13

AI Summary

This study investigates how goods or behaviors dynamically acquire prestige status and how social signals evolve—or even shift abruptly—across contexts and over time. Grounded in appropriateness theory, the work proposes that status symbols emerge endogenously through a feedback loop of social observation and predictive pattern completion. It pioneers the integration of this theoretical framework with generative agents, modeling social visibility and naturalistic everyday interactions within the Concordia multi-agent simulation environment. The experiments successfully replicate the Veblen effect (positive price elasticity) and the phenomenon of luxury price surges, demonstrating that social interaction can redirect demand from functional utility toward status-seeking. Furthermore, the study shows that opinion leaders can endogenously shape subcultures and non-monetary status signals, thereby overcoming the reliance on fixed preferences inherent in traditional costly signaling theories.

Technology Category

• Cognitive Modeling & Cognitive Systems: Social Cognition And Interaction
• Game Theory and Economic Paradigms: Mechanism Design
• Multiagent Systems: Mechanism Design

Application Category

• Economics, Online Markets and Human Computation: Social networks and social learning
• Social Networks and Social Media: Generative AI / large language models and their impact on social systems
• Semantics and Knowledge: Data modeling to support human-machine intelligence, including LLMs agents, intelligent system behavior, explanations, and user-friendly interactions

Abstract

Status signaling drives human behavior and the allocation of scarce resources such as mating opportunities, yet the generative mechanisms governing how specific goods, signals, or behaviors acquire prestige remain a puzzle. Classical frameworks, such as Costly Signaling Theory, treat preferences as fixed and struggle to explain how semiotic meaning changes based on context or drifts dynamically over time, occasionally reaching tipping points. In this work, we propose a computational theory of status grounded in the theory of appropriateness, positing that status symbols emerge endogenously through a feedback loop of social observation and predictive pattern completion. We validate this theory using simulations of groups of Large Language Model (LLM)-based agents in the Concordia framework. By experimentally manipulating social visibility within naturalistic agent daily routines, we demonstrate that social interactions transform functional demand into status-seeking behavior. We observe the emergence of price run-ups and positive price elasticity (Veblen effects) for both real-world luxury items and procedurally generated synthetic goods, ruling out pretraining bias as the sole driver. Furthermore, we demonstrate that "influencer" agents can drive the endogenous formation of distinct subcultures through targeted sanctioning, and find that similar social influence effects generalize to non-monetary signaling behaviors. This work provides a generative bridge between micro-level cognition and macro-level economic and sociological phenomena, offering a new methodology for forecasting how cultural conventions emerge from interaction.

Problem

• status signaling
• conspicuous consumption
• generative mechanisms
• cultural conventions
• Veblen effects

Innovation

• status signaling
• generative model
• large language model agents
• Veblen effect
• social influence