There are a lot of lobsters in the sea. You could even call it a glut. Over the past few years, the massive lobster harvests have resulted in a significant reduction in what buyers are paying for a lobster off the boat. So why aren’t we seeing major price drops at our local restaurants? Here’s part of the reason: A luxury good is considered a luxury good in part because it’s priced like one. Cheap lobster could throw the rest of your menu into chaos.
Studies have shown that people prefer inexpensive wines in blind taste tests, but that they actually get more pleasure from drinking wine they are told is expensive. If lobster were priced like chicken, we might enjoy it less.
In The New Yorker, James Surowiecki cracks open the surprising complexity of lobster prices.