Weddingnomics: The High Price of Signaling

Planet Money’s Caitlin Kenney teams up with Slate V to investigate why wedding dresses are so darn expensive:

It’s a great video. This is a subject that’s of interest to me since I’ll be getting married on April 14, but my fiancée and I aren’t especially tradition-minded and it turns out to be amazing what you can save by just not getting “wedding” stuff. She has a lovely dress and we have a nice space rented out with good food and plentiful booze where everyone can celebrate, and all for much less than the average American wedding even though I don’t feel like we’ve been skimping on stuff.

So to Kenney’s points about signaling, I would add that framing and context matters. We don’t drive great bargains on wedding-related things because we don’t want to see ourselves and be seen by others as being stingy about such an important event. So if you’re purchasing wedding-related items in a marketplace where everyone else is also shopping for a wedding, you’re looking at an environment where the prices are systematically higher. By contrast, if you shop in a normal store then even if you, personally, are acting in a relatively price-insensitive way the fact that everyone else is driving a harder bargain helps you out. If you’re determined to be traditional, there’s no way around this but the price you pay for self-selecting into a niche market is pretty high no matter what strategy you adopt.