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When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter

  • Aronsson, Thomas

    ()

    (Department of Economics, Umeå University)

  • Johansson-Stenman, Olof

    ()

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

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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Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 843.

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Length: 21 pages
Date of creation: 16 Aug 2012
Date of revision:
Handle: RePEc:hhs:umnees:0843
Contact details of provider: Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
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