THE ECONOMICS OF PRODUCTIVE CONSUMPTION AND POSITIONAL INVESTING

Radim Valenčík, Petr Mach and Ondřej Černík

Economy & Business Journal, 2025, vol. 19, issue 1, 1-17

Abstract: This paper brings together the results of research in the field of economics of productive consumption and positional investing. It is based on a model of supply and demand of investment funds and investment opportunities. It extends the existing results by the aspect of generating future investment opportunities (not only of the investor himself but also of other players) in the realization of the current investment opportunities. This article defines the equilibrium of this model as the maximum of future income from the realization of investment opportunities whereas this does not depend on whose investment funds are used to realize the investment opportunities and to whom additional investment opportunities are generated. This is a substantial extension of equilibrium, conceived as the utilization of investment opportunities according to their rate of return, irrespective of who owns the investment funds. The paper contains a methodology for building the relevant models and for the calculation of the equilibrium. This enables to distinguish between prisoner's dilemma situations and situations in which players have the highest payoffs if they cooperate (KK). Based on this, KK situations can be identified at different stages of history, at present, or for which conditions exist for the future. Consequently, the causes that have led or may lead to the change of a situation from KK to NN can be revealed, which has important practical applications.

Keywords: economics of productive consumption; positional investing; game theory; investment funds; investment opportunities; pareto-optimum; nash-optimum (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:isp:journl:v:19:y:2025:i:1:p:1-17

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