When Samuelson met Veblen abroad: National and global public good provision when social comparisons matter

Thomas Aronsson () and Olof Johansson-Stenman ()
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Thomas Aronsson: Umeå School of Business and Economics, Dept of Economics,, Postal: Umeå University, SE 90187 UMEÅ, Sweden

No 538, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: This paper derives Pareto efficient policy rules for the provision of national as well as global public goods in a two-country world, where each individual cares about relative consumption within as well as between countries. Furthermore, we compare these policy rules with those that follow from a non-cooperative Nash equilibrium. The results show that both global and national public goods are systematically under-provided in Nash equilibrium under such relative consumption concerns.

Keywords: Public goods; relative consumption; inter-jurisdictional comparison; status; positional goods. (search for similar items in EconPapers)
JEL-codes: D03 D62 H41 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2012-09-17
New Economics Papers: this item is included in nep-hme
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http://hdl.handle.net/2077/30279 (text/html)

Related works:
Journal Article: When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter (2014)
Working Paper: When Samuelson Met Veblen Abroad: National and Global Public Good Provision when Social Comparisons Matter (2012)
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