Exemplary Goods: The Product as Economic Variable

Abstract

This paper offers an alternative to existing economic theories of goods, which conceptualize goods as bundles of objective characteristics. We present two cases of Starbucks and Disraeli (1929 film) to show that relevant qualities of goods – along with costs and prices – emerge from the process of economic competition. The properties or characteristics of goods should thus not be taken as given. We extend the idea that economic competition is a discovery procedure beyond the discovery of costs and prices to discovery of qualities offering another way of thinking about quality adjustments through the novel theoretical concept of exemplary goods. Exemplary goods, as we argue, have a coordinative role on markets that is complementary to the role of prices. The paper concludes with implications about the delineation of goods, and the emergence of markets challenging some of the current normative conclusions in the literature.

Keywords: Competition, goods, exemplars, essentialism, market, quality, price, coordination

JEL Classification: D4, L15, Z1