Status Consumption in Networks: a Reference Dependent Approach by Christian Ghiglino

Join us for another event in the Microeconomics Internal Research Seminar Series, Autumn Term 2023.

Christian Ghiglino, will present this internal seminar on Status Consumption in Networks: a Reference Dependent Approach.

Abstract

We introduce loss aversion into a model of conspicuous consumption in networks. Agents allocate their income between a standard good and a status good to maximize a Cobb-Douglas utility. Agents interact over a connected network and compare their status consumption to their neighbors’ average consumption. Loss aversion has a profound impact. If loss aversion is large enough relative to income heterogeneity, a continuum of Nash equilibria appears and all agents consume the same quantity of status good. Otherwise, there is a unique Nash equilibrium and richest agents earn strict status gains while poorest agents earn strict status losses.

This seminar will be held in the Economics Common Room on Monday 27th November 2023 at 3.30pm. This event is open to all levels of study and is also open to the public.

To register your place and gain access to the webinar, please contact the seminar organisers.

This event is part of the Microeconomics Research Seminar Series.