%0 Report
        %A Gavrel, Frédéric
%A Rebiere, Therese
        %T On the Equilibrium and Welfare Consequences of 'Keeping up with the Joneses'
        %D 2015
        %8 2015 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 9056
        %U https://www.iza.org/publications/dp9056
        %X This paper provides an analysis of the social consequences of people seeking to keep up with the Joneses. All individuals attempt to reach a higher rank than the Joneses, including the Joneses themselves. This attitude gives rise to an equilibrium in which all individuals have equal utilities but unequal (gross) incomes. Due to a rat-race effect, individuals devote too much energy to climbing the social scale in this equilibrium. However, laissez-faire equilibrium is an equal-utility constrained social optimum. Unexpectedly, numerical simulations show that this theory could account for the observed distribution of intermediate wages.
        %K Keeping up with the Joneses
%K social interactions
%K well-being
%K inequalities
%K efficiency