IDEAS home Printed from https://ideas.repec.org/p/luc/wpaper/19-12.html
   My bibliography  Save this paper

Social division in the market: conspicuous consumption with nationalist feelings

Author

Listed:
  • Ornella Tarola

    (University of Rome, Italy)

  • Skerdilajda Zanaj

    (CREA, Université du Luxembourg)

Abstract

In this paper, we explore the effects of conspicuous goods as means of social division between native citizens and migrants. We push forward the hypothesis that choosing a particular good can confer a sense of place. We introduce this idea in an international vertical differentiation market with two variants and two social groups: migrants and natives. Natives are narrow- minded since they attribute a positive social value to the variant that complies with their own consumption culture. Migrants are open-minded. When consumers belonging to different groups meet, they exchange information about their consumption habits and consumption well-being that reveals their consumption culture: narrow-minded versus open-minded. Consequently, after meeting, some consumers may change beliefs (narrow-minded to open-minded or vice versa) and consumption choices. Using a dynamic model, we fully elucidate the steady state equilibrium and highlight the impact of nationalism on migrant integration.

Suggested Citation

  • Ornella Tarola & Skerdilajda Zanaj, 2019. "Social division in the market: conspicuous consumption with nationalist feelings," DEM Discussion Paper Series 19-12, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:19-12
    as

    Download full text from publisher

    File URL: https://wwwen-archive.uni.lu/content/download/120556/1401351/file/2019_12%20Social%20division%20in%20the%20market%20conspicuous%20consumption%20with%20nationalist%20feelings.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    2. Nekby, Lena & Rödin, Magnus & Özcan, Gülay, 2007. "Acculturation Identity and Educational Attainment," IZA Discussion Papers 3172, Institute of Labor Economics (IZA).
    3. nada, BELHADJ & GABSZEWICZ, Jean J. & TAROLA, Ornella, 2013. "Social awareness and duopoly competition," LIDAM Discussion Papers CORE 2013043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    5. Thomas Riechmann, 2006. "Mixed motives in a Cournot game," Economics Bulletin, AccessEcon, vol. 4(29), pages 1-8.
    6. Timur Kuran & William H. Sandholm, 2008. "Cultural Integration and Its Discontents," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(1), pages 201-228.
    7. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    8. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(3), pages 489-520.
    9. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    10. Rege, Mari, 2008. "Why do people care about social status?," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 233-242, May.
    11. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    12. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    13. Janssen, Maarten C. W. & Mendys-Kamphorst, Ewa, 2004. "The price of a price: on the crowding out and in of social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 377-395, November.
    14. Eduardo Pérez-Asenjo, 2011. "If happiness is relative, against whom do we compare ourselves? Implications for labour supply," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1411-1442, October.
    15. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    16. repec:ebl:ecbull:v:12:y:2006:i:2:p:1-7 is not listed on IDEAS
    17. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
    18. Joseph Cavanaugh & Michelle Alexopoulos, 2006. "Exploring the Behavior of Economic Agents: the role of relative preferences," Economics Bulletin, AccessEcon, vol. 12(2), pages 1-7.
    19. Jinkins, David, 2016. "Conspicuous consumption in the United States and China," Journal of Economic Behavior & Organization, Elsevier, vol. 127(C), pages 115-132.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ornella Tarola & skerdilajda Zanaj, 2020. "Globalization of Markets and Ethnocentrism: New Insights for the Environment," DEM Discussion Paper Series 20-18, Department of Economics at the University of Luxembourg.
    2. Jean Gabszewicz & Ornella Tarola & Skerdilajda Zanaj, 2019. "Consumption home bias and ethnocentrism: an international duopoly," DEM Discussion Paper Series 19-13, Department of Economics at the University of Luxembourg.
    3. A. Mantovani & O. Tarola & C. Vergari, 2014. "On the effect of social norms to reduce pollution," Working Papers wp950, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. Maccarrone, Giovanni & Marini, Marco A. & Tarola, Ornella, 2023. "Shop Until You Drop: the Unexpected Effects of Anticonsumerism and Environmentalism," FEEM Working Papers 330384, Fondazione Eni Enrico Mattei (FEEM).
    5. Friedrichsen, Jana, 2013. "Image concerns and the provision of quality," Discussion Papers, Research Unit: Market Behavior SP II 2013-211, WZB Berlin Social Science Center.
    6. Ceccantoni, Giulia & Tarola, Ornella & Zanaj, Skerdilajda, 2018. "Green Consumption and Relative Preferences in a Vertically Differentiated International Oligopoly," Ecological Economics, Elsevier, vol. 149(C), pages 129-139.
    7. Markus Kitzmueller, 2008. "Economics and Corporate Social Responsibility," Economics Working Papers ECO2008/37, European University Institute.
    8. Bartling, Björn & Özdemir, Yagiz, 2023. "The limits to moral erosion in markets: Social norms and the replacement excuse," Games and Economic Behavior, Elsevier, vol. 138(C), pages 143-160.
    9. Mattauch, Linus & Hepburn, Cameron & Stern, Nicholas, 2018. "Pigou pushes preferences: decarbonisation and endogenous values," INET Oxford Working Papers 2018-16, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    10. Nyborg, Karine, 2011. "I don't want to hear about it: Rational ignorance among duty-oriented consumers," Journal of Economic Behavior & Organization, Elsevier, vol. 79(3), pages 263-274, August.
    11. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    12. Friedrichsen, Jana, 2018. "Signals Sell: Product Lines when Consumers Differ Both in Taste for Quality and Image Concern," Rationality and Competition Discussion Paper Series 70, CRC TRR 190 Rationality and Competition.
    13. Agnès Festré, 2010. "Incentives And Social Norms: A Motivation‐Based Economic Analysis Of Social Norms," Journal of Economic Surveys, Wiley Blackwell, vol. 24(3), pages 511-538, July.
    14. Qian Weng & Haoran He, 2018. "Geographic Distance, Income And Charitable Giving: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1145-1169, May.
    15. Bosworth, Steven J. & Singer, Tania & Snower, Dennis J., 2016. "Cooperation, motivation and social balance," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PB), pages 72-94.
    16. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
    17. Mattauch, Linus & Hepburn, Cameron & Spuler, Fiona & Stern, Nicholas, 2022. "The economics of climate change with endogenous preferences," Resource and Energy Economics, Elsevier, vol. 69(C).
    18. Bosworth, Steven J. & Singer, Tania & Snower, Dennis J., 2016. "Cooperation, motivation and social balance," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PB), pages 72-94.
    19. Dolan, Paul & Galizzi, Matteo M., 2015. "Like ripples on a pond: Behavioral spillovers and their implications for research and policy," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 1-16.
    20. Sabrina Teyssier & Fabrice Etilé & Pierre Combris, 2012. "Social- and Self-Image Concerns in Fair-Trade Consumption: Evidence from Experimental Auctions for Chocolate," Working Papers halshs-00722592, HAL.

    More about this item

    Keywords

    relative preferences; vertical differentiation; nationalistic consumption; dynamic duopoly.;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • F18 - International Economics - - Trade - - - Trade and Environment
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:luc:wpaper:19-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marina Legrand (email available below). General contact details of provider: https://edirc.repec.org/data/crcrplu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.