 When today’s rewards are tomorrow’s endowments: The effects of inequality on social competitionEnnio Bilancini and Leonardo Boncinelli European Economic Review, 2020, vol. 129, issue C Abstract: In this paper we study the role of inequality in a model of repeated social competition where endowments (the resources used in the competition) and rewards (the resources obtained as prizes) are connected because the rewards of today’s competition determine the endowments of tomorrow’s competition. We find that the harshness of social competition is maximal for an intermediate level of inequality, and that increasing or decreasing inequality beyond that level monotonically mitigates social competition, up to completely eliminating it at the extremes. If social competition is wasteful, utilitarian welfare is maximized in case of equality. A greater uncertainty about the connection between today’s rewards and tomorrow’s endowments mitigates social competition. Finally, there emerge concerns for others’ resources that are downward and not upward, with the value of high social standing which changes non-monotonically in the resources of those with lower standing. Keywords: Social status; Social competition; Inequality; Redistribution (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:129:y:2020:i:c:s0014292120301641 DOI: 10.1016/j.euroecorev.2020.103533 Access Statistics for this article European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer More articles in European Economic Review from Elsevier |
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