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

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  • Aronsson, Thomas

    (Department of Economics, Umeå University)

  • Johansson-Stenman, Olof

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

Abstract

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.

Suggested Citation

  • Aronsson, Thomas & Johansson-Stenman, Olof, 2012. "When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter," Umeå Economic Studies 843, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0843
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    Cited by:

    1. Thomas Aronsson & Sugata Ghosh & Ronald Wendner, 2023. "Positional preferences and efficiency in a dynamic economy," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(2), pages 311-337, August.
    2. Aronsson, Thomas & Johansson-Stenman, Olof & Wendner, Ronald, 2016. "Redistribution through Charity and Optimal Taxation when People are Concerned with Social Status," MPRA Paper 68731, University Library of Munich, Germany.
    3. Aronsson, Thomas & Johansson-Stenman, Olof & Wendner, Ronald, 2019. "Charity, Status, and Optimal Taxation: Welfarist and Paternalist Approaches," Umeå Economic Studies 959, Umeå University, Department of Economics.
    4. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    5. Aronsson, Thomas & Johansson-Stenman, Olof, 2014. "State-variable public goods and social comparisons," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 390-410.
    6. Marc Daube & David Ulph, 2016. "Moral Behaviour, Altruism and Environmental Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 505-522, February.
    7. Aart Gerritsen & Harald W. Lang, 2018. "Hirschman's tunnel effect goes abroad: International dimensions of social comparison and subjective well-being," Working Papers tax-mpg-rps-2018-02, Max Planck Institute for Tax Law and Public Finance.
    8. Marc Daube, 2019. "Altruism and Global Environmental Taxes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(4), pages 1049-1072, August.
    9. Aronsson, Thomas & Johansson-Stenman, Olof, 2015. "Keeping up with the Joneses, the Smiths and the Tanakas: On international tax coordination and social comparisons," Journal of Public Economics, Elsevier, vol. 131(C), pages 71-86.
    10. repec:grz:wpaper:2016-01 is not listed on IDEAS
    11. Pedro Naso; Tania Theoduloz; Nicholas Tyack; Dambala Gelo; Mare Sarr; Timothy Swanson, 2021. "Using Information to Improve Global Cooperation: A Climate Change Experiment," CIES Research Paper series 72-2021, Centre for International Environmental Studies, The Graduate Institute.
    12. Benjamin Schalembier, 2016. "The Impact of Exposure to Other Countries on Life Satisfaction: An International Application of the Relative Income Hypothesis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(1), pages 221-239, August.

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    More about this item

    Keywords

    Public goods; relative consumption; inter-jurisdictional comparison; status; positional goods;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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