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When Samuelson met Veblen abroad: National and global public good provision when social comparisons matter

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  • Aronsson, Thomas

    ()
    (Umeå School of Business and Economics, Dept of Economics,)

  • Johansson-Stenman, Olof

    ()
    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

This paper derives Pareto efficient policy rules for the provision of national as well as global public goods in a two-country world, where each individual cares about relative consumption within as well as between countries. Furthermore, we compare these policy rules with those that follow from a non-cooperative Nash equilibrium. The results show that both global and national public goods are systematically under-provided in Nash equilibrium under such relative consumption concerns.

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File URL: http://hdl.handle.net/2077/30279
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 538.

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Length: 21 pages
Date of creation: 17 Sep 2012
Date of revision:
Handle: RePEc:hhs:gunwpe:0538

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Keywords: Public goods; relative consumption; inter-jurisdictional comparison; status; positional goods.;

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