A theory of esteem based peer pressure
Fabrizio Adriani and
Games and Economic Behavior, 2019, vol. 115, issue C, 314-335
How does the incentive to engage in social signaling depend on the composition of peers? We find that an increase in the mean peer quality may either strengthen signaling incentives (keeping up with the Joneses) or weaken them (small fish in a big pond). Both right and left truncations of the distribution of peer quality reduce signaling incentives, while more dispersed peer distributions strengthen them. Finally, more right skewed peer distributions strengthen signaling incentives when only a small fraction of the group engage in signaling, but weaken them when signaling is widespread.
Keywords: Esteem; Status; Peer pressure; Signaling; Small fish in a big pond; Conspicuous consumption; Distributional comparative statics (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
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Working Paper: A theory of esteem based peer pressure (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:115:y:2019:i:c:p:314-335
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