The law of demand : Bandwagon effect ,Snob effect and Veblen Effect

The law of demand:

 The law of demand is the most universally valid concept in economics. It says that if the prices of a commodity go up the quantity demanded would come down and if the prices fall down the quantity demanded would go up. The demand curve is a negative slope curve since the quantity demanded and the price is inversely related keeping other things constant.  

The demand can be individual demand or market demand which the summation of all individual demands at a particular time in a marketplace. The consumption decisions of individuals  are independent. There are few more factors such as Taste, preference, climate, income of the consumers , societal trends, technological up gradation also impact the demand 

Bandwagon Effect: In the real world the situation differs from the theory , in theoretical aspects says there are no network externalities. Taste of individuals are different but many a times in real world what we see are the cases of positive network externalities which implies that just for being fashionable consumer will create demand for a particular product or just because everyone is having a particular product one would also purchase follow the trend , be among the masses and promote , take the example of hair styles/ some different clothes / a new kind of glasses and so on..

Snob Effect: The snob effect is just opposite of Bandwagon Effect , here consumers would want to be different from the mass , they try to be exclusive , they would not use the product if the prices fall. its negative network externalities, for example, if the price of a particular mobile handsets is comparatively low with the same feature than that of another brand then there would be a section of society which will prefer he later one.

Veblen Effects: This was proposed by Thorstein Veblen and that is why called Veblen effect in demand theory of economics. When purchasing is made in order to impress others then demand raised due to such motive is known as Veblen Effect. In my view expenses done in Indian Marriages are the best example for it .

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