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Economics Of Productive Consumption And Multipoint Expansion Of Nash Bargaining Problem

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  • Ondřej Černík
  • Radim Valenčík
  • Petr Wawrosz

Abstract

If investment opportunities associated with acquisition, maintenance, and the use of human capital were exploited based on their performance regardless of their ownership, then, from the perspective of productive consumption economics, the distribution of social wealth would be considerably more even, thus not causing problems. Each contract between the owner of investment opportunities and the owner of financial resources can be interpreted as a specific Nash bargaining problem, where payoffs are expressed as income from the use of investment opportunities. A comparison of the microeconomic model of supply and demand of financial resources and investment opportunities with the model of contracts based on Nash bargaining problem enables (1) to identify the role of investment in a social position as the most important barrier to exploiting investment opportunities related to the acquisition, maintenance, and the use of human capital and (2) to describe the mechanism of its effects. This mechanism is based on the idea that the return on investment opportunities available to those who use the opportunity to invest in a social position increases at the expense of the return on investment opportunities of those who are victims of positional investment. The presented model offers several recommendations for solving the issue of wealth and poverty by improving the capital market.

Suggested Citation

  • Ondřej Černík & Radim Valenčík & Petr Wawrosz, 2020. "Economics Of Productive Consumption And Multipoint Expansion Of Nash Bargaining Problem," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 14(1), pages 10-25.
    • Handle: RePEc:isp:journl:v:14:y:2020:i:1:p:10-25
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    References listed on IDEAS

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    Cited by:

    1. Petr Mach & Jan Pokorný & Radim Valenčík, 2023. "Analysis Tools Of Positional Investments And The Ultimatum Game," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 17(1), pages 166-180.
    2. Radim Valenčík & Ondřej Černík, 2021. "The Inequality In Society And A Multipoint Extension Of Nash Bargaining Problem," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 15(1), pages 221-232.

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