Can Positional Concerns Enhance the Private provision of Public Goods?
The social welfare effect of positional concerns over public goods is composed of two parts, a positional outcome and an outcome in terms of public goods provision. When agents have homogenous positional preferences over the public good, they overinvest in the positional public good, resulting in a zero-sum positional race with a higher provision of the public good. When agents differ in their positional preferences, the overall impact on social welfare is positive when endowments are homogenous and uncertain when endowments are heterogeneous. Given that the social loss from position-seeking is lower than the social gain from rank seeking, there is an increase of social welfare. If agents have different initial endowments, positional preferences might still be welfare enhancing as long as the positional loss does not exceed the gain in terms of public good provision.
|Date of creation:||Apr 2010|
|Date of revision:||Apr 2010|
|Contact details of provider:|| Postal: |
Web page: http://www.lameta.univ-montp1.fr/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charness, Gary & Rabin, Matthew, 2002.
"Understanding Social Preferences with Simple Tests,"
Department of Economics, Working Paper Series
qt3d04q5sm, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences With Simple Tests," The Quarterly Journal of Economics, MIT Press, vol. 117(3), pages 817-869, August.
- Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA.
- Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
- Robert H. Frank, 2005. "Positional Externalities Cause Large and Preventable Welfare Losses," American Economic Review, American Economic Association, vol. 95(2), pages 137-141, May.
- Sara J. Solnick & David Hemenway, 2005. "Are Positional Concerns Stronger in Some Domains than in Others?," American Economic Review, American Economic Association, vol. 95(2), pages 147-151, May.
- Ng, Yew-Kwang & Wang, Jianguo, 1993. "Relative income, aspiration, environmental quality, individual and political myopia : Why may the rat-race for material growth be welfare-reducing?," Mathematical Social Sciences, Elsevier, vol. 26(1), pages 3-23, July.
- Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-16, March.
- Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2005.
"How much do we care about absolute versus relative income and consumption?,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 56(3), pages 405-421, March.
- Alpizar, Francisco & Carlsson, Fredrik & Johansson-Stenman, Olof, 2001. "How Much Do We Care About Absolute Versus Relative Income and Consumption?," Working Papers in Economics 63, University of Gothenburg, Department of Economics.
- Clark, Andrew E. & Oswald, Andrew J., 1994.
"Satisfaction and comparison income,"
CEPREMAP Working Papers (Couverture Orange)
- Ngo Van Long & Shengzu Wang, 2008.
"Resource-Grabbing By Status-Conscious Agents,"
Departmental Working Papers
2008-08, McGill University, Department of Economics.
- Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
- Hollander, Heinz, 1990. "A Social Exchange Approach to Voluntary Cooperation," American Economic Review, American Economic Association, vol. 80(5), pages 1157-67, December.
- Frank, Robert H., 2008. "Should public policy respond to positional externalities?," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1777-1786, August.
When requesting a correction, please mention this item's handle: RePEc:lam:wpaper:10-04. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Patricia Modat)
If references are entirely missing, you can add them using this form.