Relational Consumption and Nonlinear Dynamics in an Overlapping Generations Model
AbstractIn this paper, we show that incorporating the relational dimension into an otherwise standard OLG model and focusing on dynamic leisure externalities leads to dramatically different predictions. Here we show that when the old perceive private and relational consumption as substitutable goods, a series of interesting dynamic outcomes - such as local indeterminacy, non-linear phenomena (including chaotic dynamics) and even multiple equilibria with global indeterminacy - may arise. We also draw some welfare implications and relate them to the well-known ‘happiness paradox’ arising within contemporary affluent societies.
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Bibliographic InfoPaper provided by University of Verona, Department of Economics in its series Working Papers with number 13/2012.
Date of creation: Mar 2012
Date of revision:
overlapping generations framework; growth; leisure; relational goods; happiness paradox;
Other versions of this item:
- Antoci, Angelo & Sodini, Mauro & Zarri, Luca, 2012. "Relational consumption and nonlinear dynamics in an overlapping generations model," AICCON Working Papers 103-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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