Preferences over Consumption and Status

Alexander Vostroknutov ()

MPRA Paper from University Library of Munich, Germany

Abstract: In many models of interdependent preferences the payoffs have not only personal value but also enter the social part of the utility. This duality creates a problem of distinguishing what influences the choice more: consumption or social concerns. To identify what drives the behavior it is necessary to have a model of preferences that allows for unambiguous separation of personal and social components. I use the preferences for consumption and status as an example to show that the axioms in the paper describe the preferences that have unique expected utility representation with consumption and social utilities entering additively. This makes it possible to experimentally determine the nature of social preferences without ad hoc assumptions and to estimate whether consumption or social value is more important in economic decisions.

Keywords: Interdependent preferences; status; subjective probability (search for similar items in EconPapers)
JEL-codes: C90 D01 D11 (search for similar items in EconPapers)
Date: 2007-02, Revised 2007-06
New Economics Papers: this item is included in nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2594

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