On the viability of gift exchange in a market environment

T. van de Klundert and Jeroen van de Ven ()

No 113, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: Is gift-exchange inevitably to be crowded out by impersonal market exchange? The presence of a thick-market externality indicates that this is indeed likely to be the case. But reciprocity or gift-exchange induces social relations. The utility function is extended in order to take account of social relations in the form of symbolic utility or moral sentiments. As long as moral sentiments are valued high enough it is shown that both market and gift-exchange can coexist. The spontaneous order need not necessarily select the most e"cient market size however.

Keywords: gift; giving (search for similar items in EconPapers)
JEL-codes: A13 D51 D62 E11 L17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-mic
Date: 1999
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