Identity, Envy and Resource Loss

Diganta Mukherjee ()
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Diganta Mukherjee: Sampling and Official Statistics Unit, Indian Statistical Institute, Kolkata 700 108, West Bengal, India

International Game Theory Review (IGTR), 2015, vol. 17, issue 01, 1-13

Abstract: This paper looks at society divided into two groups where personal assets as well as group specific values influences the individuals' utility (positively for own group's value and possibly otherwise for the other group's value). Individual resource allocation problem may lead to under investment in production of assets and excessive diversion of resources into wasteful destructive activities. As a result, the net utility is lowered for all individuals. On the economic front, such usage of resource boosts the "black market" economy and results in dead weight loss. Because in equilibrium both the personal as well as social value created is smaller, on the social front these activities encourage social disintegration.

Keywords: Conflict; envy; externality; identity; D31; D74 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S0219198915400101

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