Comment by nine_k
3 days ago
I see your point. But the choice between an iPhone and a Galaxy is mostly the ecosystem. And the choice between OnePlus and a Galaxy S is mostly about the quality of the camera. And the choice between a Galaxy and a Xioami is mostly about trusting a Chinese brand (not for its technical merits; they make excellent devices). The real quality / price differentiation, to my mind, lies farther down the scale.
That is, the choice between a $10 organic grass-fed milk and $8 organic grass-fed milk is literally a matter of taste, not the $2 price difference. The real price/quality choice is between the $10 fancy organic milk, $4.99 okay milk, and $2.49 bottom-shelf milk. They attract materially different customer segments.
There are many behavioral economics ideas about smartphone choices. There are various psychological aspects, such as lifestyle, status, social and personal values, and political influences. That is all true.
The strongest decider for whether a good will show positive or negative elastic demand (and be considered superior or inferior) is probably how it's branded, pricing strategy included. For example, wealthy people shop in boutiques more than large retail centers, though the items sold are often sourced from the same suppliers. The difference? Branding, including pricing.
You're right about basic goods, such as groceries. Especially goods that are almost perfectly identical and freely substitutable, like milk. What's a superior or inferior good becomes hard to guess when there is a high degree of differentiation (as you say, ecosystems, cameras, security). It's easier to measure than predict.
Anyway, this is all a "fun fact." My original comment really does make the assumption that software, which is relatively substitutable, is like the milk example — the price and the inferiority/superiority are strongly correlated. And the entire expensive software market has collapsed like the expensive secondary market for used cars.