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Resource-grabbing by status-conscious agents

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  • Long, Ngo Van
  • Wang, Shengzu

Abstract

We introduce a dynamic model of resource-grabbing by status-conscious agents, i.e., agents value not only their absolute consumption levels, but also the relative status within their reference group. We explore the effect of the concern for relative consumption on the growth rate and the welfare of an economy where agents appropriate from a common property resource. Our model shows that the greater is agents' concern about their relative status, the more aggressively they tend to behave. Consequently, social welfare is lower because the growth rate of the public asset is reduced due to higher extraction rate. We also consider the effect of increased heterogeneity, and show that social welfare decreases as the distribution of status-consciousness among agents widens.

Suggested Citation

  • Long, Ngo Van & Wang, Shengzu, 2009. "Resource-grabbing by status-conscious agents," Journal of Development Economics, Elsevier, vol. 89(1), pages 39-50, May.
    • Handle: RePEc:eee:deveco:v:89:y:2009:i:1:p:39-50
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    Cited by:

    1. Douadia Bougherara & Sandrine Costa & Gilles Grolleau & Lisette Ibanez, 2019. "Do positional preferences cause welfare gains?," Economics Bulletin, AccessEcon, vol. 39(2), pages 1228-1241.
    2. Benchekroun, Hassan & Long, Ngo Van, 2016. "Status concern and the exploitation of common pool renewable resources," Ecological Economics, Elsevier, vol. 125(C), pages 70-82.
    3. Francisco Cabo & Alain Jean-Marie & Mabel Tidball, 2022. "Positional effects in public good provision. Strategic interaction and inertia," CEE-M Working Papers hal-03649283, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    4. Koichi Futagami & Yuta Nakabo, 2021. "Capital accumulation game with quasi-geometric discounting and consumption externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 251-281, February.
    5. Francisco Alvarez-Cuadrado & Ngo Van Long, 2008. "Relative Consumption and Resource Extraction," CIRANO Working Papers 2008s-27, CIRANO.
    6. Wei-Bin Zhang, 2015. "Oscillations in a Growth Model with Endogenous Wealth, Resource, Housing, and Elastic Labour Supply," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(9), pages 458-472, September.
    7. Fujiwara, Kenji, 2011. "Losses from competition in a dynamic game model of a renewable resource oligopoly," Resource and Energy Economics, Elsevier, vol. 33(1), pages 1-11, January.
    8. Zhang Wei-Bin, 2011. "Economic Growth And Dynamics Of Renewable Resource With Housing, Agricultural And Resource Land Use," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 6(2), pages 151-174, August.
    9. Wei-Bin Zhang, 2017. "Growth with Endogenous Capital, Knowledge, and Renewable Resources," Romanian Statistical Review, Romanian Statistical Review, vol. 65(1), pages 19-37, March.
    10. Van Long, Ngo, 2016. "The Impacts of Other-Regarding Preferences and Ethical Choice on Environmental Outcomes: A Review of the Literature," Strategic Behavior and the Environment, now publishers, vol. 6(1-2), pages 1-35, December.
    11. Hamid Beladi & Sugata Marjit & Reza Oladi & Lei Yang, 2021. "Malnutrition in the shadow of economic growth," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 500-514, February.
    12. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
    13. Wei-Bin ZHANG, 2014. "Human Capital, Wealth, and Renewable Resources," Expert Journal of Economics, Sprint Investify, vol. 2(1), pages 1-20.
    14. ZHANG Wei-Bin, 2015. "Values Of Land And Renewable Resources In A Three-Sector Economic Growth Model," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(1), pages 156-186, April.
    15. Douadia Bougherara & Sandrine Costa & Gilles Grolleau & Lisette Ibanez, 2010. "Can Positional Concerns Enhance the Private provision of Public Goods?," Working Papers 10-04, LAMETA, Universtiy of Montpellier, revised Apr 2010.
    16. Douadia Bougherara & Sandrine Costa & Gilles Grolleau & Lisette Ibanez, 2019. "Do positional preferences cause welfare gains?," Post-Print hal-02154557, HAL.

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    More about this item

    Keywords

    Rent-seeking Status Relative consumption Welfare Heterogeneity;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D6 - Microeconomics - - Welfare Economics
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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