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Far above others

Author

Listed:
  • Dunia López-Pintado

    (Universidad Pablo de Olavide)

  • Miguel A. Meléndez-Jiménez

    (Universidad de Málaga)

Abstract

We study the role of competitive behavior in a social network. Agents gain a competitive premium by obtaining a higher outcome than their neighbors (i.e., their reference group). We assume societies in which the level of competition can be strong, mild or weak (i.e., agents compare themselves with the best, the average or the worst outcome in their reference group, respectively). Surprisingly, we find that in a more competitive society less aggregate effort is provided. An increase in the density and homogeneity of the network decreases total effort in the strong-competitive case, whereas the opposite occurs in the weak-competitive setting.

Suggested Citation

  • Dunia López-Pintado & Miguel A. Meléndez-Jiménez, 2018. "Far above others," Working Papers 18.12, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:18.12
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    References listed on IDEAS

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    More about this item

    Keywords

    behavioral economics; reference points; social comparisons; competition; social networks.;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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