Pride and Diversity in Social Economies
- (pp. 237-71)
Abstract
We study a two-period economy in which agents preferences take into account their relative economic position. The study builds on a decision theoretic analysis of the social emotions that underlie these relative concerns. These emotions, envy and pride, respond to social losses and gains, respectively. Our main result is that envy leads to conformism in consumption behavior and pride to diversity. We thus establish a link between emotions that are object of study in psychology and neuroscience, and important features of economic variables, in the first place the equilibrium distribution of consumption and income.Citation
Maccheroni, Fabio, Massimo Marinacci, and Aldo Rustichini. 2014. "Pride and Diversity in Social Economies." American Economic Journal: Microeconomics, 6 (4): 237-71. DOI: 10.1257/mic.6.4.237Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D51 Exchange and Production Economies
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- E21 Macroeconomics: Consumption; Saving; Wealth
- J22 Time Allocation and Labor Supply
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