IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v72y2020i3p804-828..html
   My bibliography  Save this article

Capital accumulation when consumers are tempted by others’ consumption experience

Author

Listed:
  • Jaime Alonso-CarreraBy
  • Stéphane Bouché

Abstract

We analyse how the influence of peer effects on self-control affects capital accumulation. We consider an overlapping generations model where individuals are tempted to take the economy-wide average consumption as an aspiration. Consumers exhibit a preference for self-control. They face a self-control problem, and observing each other’s consumption determines the individual’s capacity to deal with this problem. We show that temptation and self-control may either increase or decrease the accumulation of capital. The crucial point would be whether or not consumers take the consumption of the individuals belonging to the other living generations as a reference in forming their aspirations. This point also crucially determines the stability properties of the equilibrium paths.

Suggested Citation

  • Jaime Alonso-CarreraBy & Stéphane Bouché, 2020. "Capital accumulation when consumers are tempted by others’ consumption experience," Oxford Economic Papers, Oxford University Press, vol. 72(3), pages 804-828.
    • Handle: RePEc:oup:oxecpp:v:72:y:2020:i:3:p:804-828.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/oep/gpz046
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:72:y:2020:i:3:p:804-828.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.