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Equilibrium Social Hierarchies: A Non-Cooperative Ordinal Status Game

Author

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  • Haagsma Rein

    (Wageningen University)

  • van Mouche Pierre

    (Wageningen University)

Abstract

We analyze a game in strategic form, where each player's payoff depends on his action and his social status, which is given by his rank in the actions distribution. Our focus is on the relation between the degree of heterogeneity among status-seeking players and the distribution of their Nash equilibrium actions. We find that if among players intrinsic concerns are sufficiently important relative to status concerns, individual equilibrium actions diverge, but if status concerns are relatively important, individual equilibrium actions are the same. Another key result of the analysis is that, in contrast to what is usually claimed, status seeking need not always be socially inefficient. If players are sufficiently heterogeneous, there exists a Nash equilibrium that is unique, separating, and Pareto efficient.

Suggested Citation

  • Haagsma Rein & van Mouche Pierre, 2010. "Equilibrium Social Hierarchies: A Non-Cooperative Ordinal Status Game," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-49, June.
    • Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:24
    DOI: 10.2202/1935-1704.1585
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    Citations

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    Cited by:

    1. Bilancini, Ennio & Boncinelli, Leonardo, 2014. "Instrumental cardinal concerns for social status in two-sided matching with non-transferable utility," European Economic Review, Elsevier, vol. 67(C), pages 174-189.
    2. Bilancini, Ennio & Boncinelli, Leonardo, 2019. "Wage inequality, labor income taxes, and the notion of social status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-35.
    3. Haagsma, Rein, 2018. "Income inequality and saving in a class society: The role of ordinal status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-31.
    4. Kukushkin, Nikolai S., 2019. "Equilibria in ordinal status games," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 130-135.
    5. Nikolai S. Kukushkin & Pierre von Mouche, 2018. "Cournot tatonnement and Nash equilibrium in binary status games," Economics Bulletin, AccessEcon, vol. 38(2), pages 1038-1044.
    6. Luis C. Corchón, 2021. "Aggregative games," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(1), pages 49-71, March.
    7. Kukushkin, Nikolai S., 2022. "Ordinal status games on networks," Journal of Mathematical Economics, Elsevier, vol. 100(C).
    8. Haagsma, Rein, 2018. "Income inequality and saving in a class society: The role of ordinal status," Economics Discussion Papers 2018-12, Kiel Institute for the World Economy (IfW Kiel).
    9. Brown, Philip H. & Bulte, Erwin & Zhang, Xiaobo, 2011. "Positional spending and status seeking in rural China," Journal of Development Economics, Elsevier, vol. 96(1), pages 139-149, September.
    10. Staab, Manuel, 2019. "The Formation of Social Groups under Status Concern," MPRA Paper 97114, University Library of Munich, Germany.
    11. Claudius Gros, 2021. "Collective strategy condensation: When envy splits societies," Papers 2101.10824, arXiv.org.

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