The snob effect is based on the idea that people buy a particular item because it is expensive. We used Rolex watches as an example. Certainly they are fine watches, but without question many people buy them because they are a recognized emblem of financial success, not because they need such a well-made watch. The same is true of high-end automobiles, very expensive clothing and other, easily recognizable marks of wealth.

If Rolex watches are bought primarily to serve as an indicator of the financial success of the owner then is it reasonable to suppose that an increase in the price of Rolex watches increases the quantity sold? Whether it does or not, let's suppose it does. Even if it does, we can still quite easily explain this without resorting to a violation of the law of demand.

If you buy a watch to signal your financial success to other people then what matters isn't what you actually paid for the watch, it is what other people believe you paid for it. Once we understand this fundamental fact, we can explain everything without violating the law of demand.