Relational Consumption and Nonlinear Dynamics in an Overlapping Generations Model
Mauro Sodini () and
No 13/2012, Working Papers from University of Verona, Department of Economics
In this paper, we show that incorporating the relational dimension into an otherwise standard OLG model and focusing on dynamic leisure externalities leads to dramatically different predictions. Here we show that when the old perceive private and relational consumption as substitutable goods, a series of interesting dynamic outcomes - such as local indeterminacy, non-linear phenomena (including chaotic dynamics) and even multiple equilibria with global indeterminacy - may arise. We also draw some welfare implications and relate them to the well-known ‘happiness paradox’ arising within contemporary affluent societies.
Keywords: overlapping generations framework; growth; leisure; relational goods; happiness paradox (search for similar items in EconPapers)
JEL-codes: D63 J22 O33 O41 Z13 (search for similar items in EconPapers)
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Journal Article: Relational consumption and nonlinear dynamics in an overlapping generations model (2014)
Working Paper: Relational consumption and nonlinear dynamics in an overlapping generations model (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ver:wpaper:13/2012
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