We present a model incorporating both social and economic components, and analyze their interaction. The notion of a social asset, an attribute that has value only because of the social institutions governing society, is introduced. In the basic model, agents match on the basis of income and unproductive attributes. An attribute has value in some equilibrium social institutions (matching patterns), but not in others. We then show that productive attributes (such as education) can have their value increased above their inherent productive value by some social institutions, leading to the notion of the social value of an asset.
|Date of creation:||07 Mar 2002|
|Date of revision:||04 Jun 2004|
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- George J. Mailath & Andrew Postlewaite, 2003.
"The Social Context of Economic Decisions,"
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