Finding Value During the Economic Recovery

Isaac Mostovicz writes that understand value is important during the recovery...

The economic recovery continues. According to this story in the New York Times, wealthy people are spending money again, but they’re keener than ever to find value.

According to Jane Bayard, executive vice president at Warburg Realty Partnership of Manhattan:

Today if they buy, they are not willing to be embarrassed by overpaying. There were times in 2007, for example, when there were multiple offers and people paid millions over the asking price. Today, nobody wants to be the last monkey in the tree.

Let’s think about this from a Theta-Lambda perspective. It seems as if part of the reason that people are unwilling to overpay is because they don’t want to be embarrassed in front of their wealthy peers. This ‘seeking affiliation and belonging’ characteristic is a typical Theta behavior. Lambdas are less sensitive to prices and more sensitive to the value they will get personally from an item, and how it will make them unique. As the economic recovery continues, it will be interesting to see if Lambdas are as sensitive to value as Thetas, still looking for things that challenge themselves, but at a lower cost than before.

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