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Last year, we wrote about a fascinating “art” project, called “Significant Objects,” that involved a bunch of writers buying up random cheap/worthless trinkets, but then listing them on eBay along with a creative (fictional) story about the object. The “story” was given away for free, but the object cost money. What those involved in the project quickly found was that these worthless trinkets were suddenly selling for a lot more than their nominal “price.” It was a perfect example of how an infinite good (the story), when properly attached to a scarce good (the trinket), can make that scarce good much more valuable. This is a point that many have trouble grasping. They think, when we discuss the economics of infinite and scarce goods, that the price on scarce goods always remains the same, and never seem to take into account how a connected infinite good can greatly raise the value and the price of a scarce good. A hit song (infinite) heard by millions increases the price of a concert tickets (scarce). A brilliant blog post (infinite) can increase the price of a consultant (scarce) who wrote it. A sterling reputation (infinite) for an automobile company can increase the price of the cars (scarce) they sell. It goes on and on and on.
The Significant Objects experiment was just a neat “pure” example of this in action, clearly showing how objects that otherwise would have been valued quite low by most potential buyers, could gain in value when an infinite element (a good story) was attached.
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