TY  - RPRT
        AU  - Gavrel, Frédéric
AU  - Rebiere, Therese
        TI  - On the Equilibrium and Welfare Consequences of 'Keeping up with the Joneses'
        PY  - 2015/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 9056
        UR  - https://www.iza.org/publications/dp9056
        AB  - 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.
        KW  - Keeping up with the Joneses
KW  - social interactions
KW  - well-being
KW  - inequalities
KW  - efficiency
        ER  -