Resource-Grabbing By Status-Conscious Agents
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, the social welfare is lower because the growth rate of the public asset is reduced doe 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.
|Date of creation:||Apr 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (514) 398-3030
Fax: (514) 398-4938
Web page: http://www.repec.mcgill.ca
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.:
- Clark, Andrew E. & Oswald, Andrew J., 1994.
"Satisfaction and comparison income,"
CEPREMAP Working Papers (Couverture Orange)
- Luttmer, Erzo F. P., 2004.
"Neighbors as Negatives: Relative Earnings and Well-Being,"
Working Paper Series
rwp04-029, Harvard University, John F. Kennedy School of Government.
- Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 963-1002, August.
- Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, National Bureau of Economic Research, Inc.
- Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
- Lane, Philip R & Tornell, Aaron, 1996. " Power, Growth, and the Voracity Effect," Journal of Economic Growth, Springer, vol. 1(2), pages 213-41, June.
- Cornes, Richard, 1993. "Dyke Maintenance and Other Stories: Some Neglected Types of Public Goods," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 259-71, February.
- Baland, Jean-Marie & Platteau, Jean-Philippe, 1997. "Wealth Inequality and Efficiency in the Commons: Part I: The Unregulated Case," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 451-82, October.
- Neumark, David & Postlewaite, Andrew, 1998.
"Relative income concerns and the rise in married women's employment,"
Journal of Public Economics,
Elsevier, vol. 70(1), pages 157-183, October.
- David Neumark & Andrew Postlewaite, 1995. "Relative Income Concerns and the Rise in Married Women's Employment," NBER Working Papers 5044, National Bureau of Economic Research, Inc.
- Jeff Dayton-Johnson and Pranab Bardhan., 1996.
"Inequality and Conservation on the Local Commons: A Theoretical Exercise,"
Center for International and Development Economics Research (CIDER) Working Papers
C96-071, University of California at Berkeley.
- Jeff Dayton-Johnson & Pranab Bardhan, 2002. "Inequality And Conservation On The Local Commons: A Theoretical Exercise," Economic Journal, Royal Economic Society, vol. 112(481), pages 577-602, July.
- Dayton-Johnson, Jeff & Bardhan, Pranab, 1996. "Inequality and Conservation on the Local Commons: A Theoretical Exercise," Center for International and Development Economics Research, Working Paper Series qt7f9913w9, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
- Ngo Van Long & Gerhard Sorger, 2004.
"Insecure Property Rights and Growth: The Roles of Appropriation Costs, Wealth Effects, and Heterogeneity,"
CESifo Working Paper Series
1253, CESifo Group Munich.
- Ngo Long & Gerhard Sorger, 2006. "Insecure property rights and growth: the role of appropriation costs, wealth effects, and heterogeneity," Economic Theory, Springer, vol. 28(3), pages 513-529, 08.
- Pollak, Robert A, 1976. "Interdependent Preferences," American Economic Review, American Economic Association, vol. 66(3), pages 309-20, June.
- Karen E. Dynan & Enrichetta Ravina, 2007. "Increasing Income Inequality, External Habits, and Self-Reported Happiness," American Economic Review, American Economic Association, vol. 97(2), pages 226-231, May.
- repec:cup:cbooks:9780521637329 is not listed on IDEAS
- Bill Dupor & Wen-Fang Liu, 2003. "Jealousy and Equilibrium Overconsumption," American Economic Review, American Economic Association, vol. 93(1), pages 423-428, March.
- Gali, Jordi, 1994.
"Keeping Up with the Joneses: Consumption Externalities, Portfolio Choice, and Asset Prices,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 26(1), pages 1-8, February.
- Gali, J., 1992. "Keeping Up with the Joneses: Consumption Externalities, Portfolio Choice and Asset Prices," Papers 92-22, Columbia - Graduate School of Business.
- Curtis Eaton & Mukesh Eswaran, 2003. "The evolution of preferences and competition: a rationalization of Veblen's theory of invidious comparisons," Canadian Journal of Economics, Canadian Economics Association, vol. 36(4), pages 832-859, November.
- Smith, Adam, 1759. "The Theory of Moral Sentiments," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1759.
- Gerhard Sorger, 2005. "A dynamic common property resource problem with amenity value and extraction costs," International Journal of Economic Theory, The International Society for Economic Theory, vol. 1(1), pages 3-19.
- Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
- Baland, Jean-Marie & Platteau, Jean-Philippe, 1998. "Wealth Inequality and Efficiency in the Commons, Part II: The Regulated Case," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 1-22, January.
- Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, vol. 41(3), pages 371-386, January.
- Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, vol. 61(2), pages 527-542, April.
- Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-31, December.
- Francisco Alvarez-Cuadrado & Ngo Van Long, 2008. "Relative Consumption and Resource Extraction," CIRANO Working Papers 2008s-27, CIRANO.
- Fisher, Walter H. & Hof, Franz X., 2000. "Relative Consumption and Endogenous Labour Supply in the Ramsey Model: Do Status-Conscious People Work Too Much?," Economics Series 85, Institute for Advanced Studies.
When requesting a correction, please mention this item's handle: RePEc:mcl:mclwop:2008-08. 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: (Shama Rangwala)The email address of this maintainer does not seem to be valid anymore. Please ask Shama Rangwala to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.