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Overcoming Bias Commenter's avatar

Even with incentive, people will always compare themselves to other people and then prove that their x is better than the other person's x. Or simply, that the other person doesn't have an x, but the speaker does, which would, supposedly, put one person higher than the other on whatever subjective scale the two have. The second person might respond that they do not measure themselves along x, but that won't stop the first person from acquiring x to impress someone else. Prestige is important, and we'll always make excuses to be treated better/higher up than other people. As some comments have made clear, there's always a bit of utility and a bit of show in our material goods, and we typically buy those things for both.

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Overcoming Bias Commenter's avatar

Hence raising taxes on diamonds may increase government revenue without negatively affecting the opportunities for status signaling.

I wonder what would happen if there was a tax on lentils. A dollar a bean. Lentil soup would cost hundreds of dollars a serving! Perhaps it would be the ultimate luxury tax.

I'm only half kidding. A tax on lentils would only create a black market. ;-)

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