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Kula and relation capital: Rational reinterpretation of primitive gift institution

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  • Jaehyuck Lee

Abstract

We take the view that social institution can be interpreted as equilibrium outcomes from the rational conduct of social exchanges. ‘Relation capital’ captures the idea that people make an optimal choice in their tie-makings as well as individual acts. We reinterpret from a rational choice perspective the well-known gift institution of primitive society documented by classical anthropological studies, the kula . We provide a detailed analysis of kula in terms of relation capital accumulation and fame building. The dynamic optimization perspective is applied to reinterpret various aspects of this ceremonial exchange. A formal model of the kula economy is provided to show the unstable nature of the gift equilibrium. Optimal time paths of consumption and gift-giving are derived, and a sufficient condition for the instability of the steady state is formally provided. Many qualitative discussions are characterized in terms of formal results, including the reason for the specific form of kula.

Suggested Citation

  • Jaehyuck Lee, 2011. "Kula and relation capital: Rational reinterpretation of primitive gift institution," Rationality and Society, , vol. 23(4), pages 475-512, November.
    • Handle: RePEc:sae:ratsoc:v:23:y:2011:i:4:p:475-512
    DOI: 10.1177/1043463111425011
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    References listed on IDEAS

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    1. Avner Offer, 1997. "Between the gift and the market: the economy of regard," Economic History Review, Economic History Society, vol. 50(3), pages 450-476, August.
    2. Jonathan P. Thomas & Timothy Worrall, 2002. "Gift-giving, Quasi-credit and Reciprocity," Rationality and Society, , vol. 14(3), pages 308-352, August.
    3. Stephen Gudeman, 2005. "Community and Economy: Economy's Base," Chapters, in: James G. Carrier (ed.), A Handbook of Economic Anthropology, chapter 6, Edward Elgar Publishing.
    4. Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244.
    5. Posner, Richard A, 1980. "A Theory of Primitive Society, with Special Reference to Law," Journal of Law and Economics, University of Chicago Press, vol. 23(1), pages 1-53, April.
    6. Yunxiang Yan, 2005. "The Gift and Gift Economy," Chapters, in: James G. Carrier (ed.), A Handbook of Economic Anthropology, chapter 15, Edward Elgar Publishing.
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    Cited by:

    1. Giuseppe Danese & Luigi Mittone, 2015. "Norms and trades: An experimental investigation," Rationality and Society, , vol. 27(3), pages 259-282, August.

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