Comment by everdrive
1 month ago
The fridge example is an interesting problem. A middle class person would probably be much better off just buying a used or cheap fridge. ~$100 - $1000. It will last as long as the $3500 - $5000 fridge and will cost a fraction as much. (and due to not being premium-aka-huge will be much easier to cart inside and outside of your house when it does break down.)
In _principle_ the truly rich person would be better off with a really expensive fridge. Except the chances that it performs better or lasts longer are tiny. So for 4x-10x the price, you have no improvement. The only way to improve your outcome is to spend enough time doing research such that you can figure out if _any_ refrigerators aren't pieces of crap. A for-real rich person has more money than time, so this isn't worth it either. Yes, they might settle on the first fridge that's available and looks nice -- and this _could_ be a premium fridge -- but they really don't get any benefit from a premium fridge either. ie, there's nothing to really push them from a $2k fridge to a $5k fridge unless it's just something like capacity.
In other words, poor-to-middle class should NEVER buy a premium fridge -- but only because the market is terrible and "premium" _usually_ does not mean "more reliable." (if premium meant "much more reliable" then they should buy premium when they can afford it, as it would cost less over time due to longevity.) However, a rich person also accrues almost no benefit from a premium fridge, as the real cost to them is research time and not money.
So, who are these products for? Probably middle class people who want to _appear_ rich.
Sometimes buying a longer-lived fridge for more money is still a bad bargain. If the short-lived fridge lives 20 years and the longer-lived one lives 100 years, the longer-lived one is a bad bargain if it costs twice as much, at any discount rate over about 3.34%. If it costs 4×, it's a bad bargain at any discount rate over 0.59%. At a 3% discount rate, the 4× fridge is a bad bargain even if you have to replace the short-lived fridge every 10 years.
However, probably the major cost of fridge failures is not replacement but the destruction of the fridge contents. A friend of mine recently lost their freezerful of food. Apparently after a power outage the freezer forgot whether it should be a freezer or a regular fridge and defaulted to "neither". This is an example of a "premium" feature making the freezer worse.