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Pride and Diversity in Social Economies

Author

Listed:
  • Fabio Maccheroni Jr.
  • Massimo Marinacci Jr.
  • Aldo Rustichini Jr.

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.

Suggested Citation

  • Fabio Maccheroni Jr. & Massimo Marinacci Jr. & Aldo Rustichini Jr., 2014. "Pride and Diversity in Social Economies," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 237-271, November.
    • Handle: RePEc:aea:aejmic:v:6:y:2014:i:4:p:237-71
    Note: DOI: 10.1257/mic.6.4.237
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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