Relative wealth, status-seeking, and catching-up
AbstractWe show that, if relative wealth appears in the utility function, for example due to status seeking, then under certain conditions on the curvature of the utility function and the production function, the poor will eventually catch up with the rich. We give sufficient conditions for the final distribution of wealth to be independent of the initial distribution, and conditions for saddlepoint stability in a two-class model. Nous dÃ©montrons que si l'utilitÃ© est une fonction de la richesse relative, peut-Ãªtre Ã cause de la recherche du standing, alors, sous certaines hypothÃ¨ses concernant la courbature de la fonction d'utilitÃ© et de la fonction de production, les gens pauvres peuvent rattraper les gens riches. Nous donnons des conditions suffisantes pour que la distribution de richesse finale soit indÃ©pendante de la distribution initiale, ainsi que les conditions suffisantes pour la stabilitÃ© au sens du point de selle.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 53 (2004)
Issue (Month): 4 (April)
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Web page: http://www.elsevier.com/locate/jebo
Other versions of this item:
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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