2007 Research Fair - Business Abstracts
Updating Veblen: Understanding the Pervasive Role
Over 100 years have past since Thorstein Veblen introduced the concept of conspicuous consumption and effectively skewered the way in which consumers in affluent economies “bend their energies” toward the pursuit of status once their material needs have been satisfied. By updating Veblen’s model for conspicuous consumption to account for both oversimplification by critics and the emergence of more sophisticated interdisciplinary research on consumerism, a more powerful lens emerges for identifying the pervasive presence of aggregately wasteful spending patterns that fail to contribute to human welfare. This paper explores not only the nature of conspicuous consumption and its role in the economy, but also the potential catalysts for growth, the costs and forgone opportunities society faces, the policy considerations for a behavior that economist Robert Frank identifies as “smart for one, dumb for all,” and the challenges conspicuous consumption poses to fundamental and widely-accepted assumptions in neoclassical economic theory.
Executive Compensation: Where do we draw the line?
In recent years, executives of many large corporations have taken advantage of their positions to create situations that are personally beneficial; however the fallout has crippling economic effects on the market. When this occurs we must ask ourselves, how did this happen? Often we see that these events occur due to the greed that an executive’s compensation package creates. This paper looks at the foundations of executive compensation and its policies to better understand the process of executive compensation and to determine whether or not a change is needed. In this analysis, we look at the types of executive compensation, their characteristics, and how they stand up to abuse from executives. We look at actual situations to see problems that have occurred and trends in today’s compensation spotlight. In conclusion, an analysis of these factors will lead to a determination of whether the policies that are currently in place are adequate, or whether a change is needed to prevent these situations from occurring in the future.