When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter
2014 (English)In: Economica, ISSN 0013-0427, E-ISSN 1468-0335, Vol. 81, no 322, 224-243 p.Article in journal (Refereed) Published
This paper derives Pareto-efficient provision rules for national and global public goods in a two-country world, where each individual cares about his or her relative consumption of private goods compared to other domestic and foreign residents. We contrast these rules with those following from a non-cooperative Nash equilibrium. Both national and global public goods are underprovided in Nash equilibrium under such relative consumption concerns. Finally, when individuals also care about the relative consumption of national public goods, based on between-country comparisons, the optimal provision rule depends on whether or not the national public goods are less positional than private consumption.
Place, publisher, year, edition, pages
John Wiley & Sons, 2014. Vol. 81, no 322, 224-243 p.
Public goods, relative consumption, inter-jurisdictional comparison, status, positional goods
Research subject Economics
IdentifiersURN: urn:nbn:se:umu:diva-80666DOI: 10.1111/ecca.12058ISI: 000332599000003ScopusID: 2-s2.0-84895895015OAI: oai:DiVA.org:umu-80666DiVA: diva2:650723
FunderSwedish Research Council, 421-2010-1420
Även utgiven som: Umeå economic Studies. (2012), Nr 843.2013-09-232013-09-232014-12-22Bibliographically approved