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Do positional preferences cause welfare gains?

Author

Listed:
  • Douadia Bougherara

    (CEE-M, Univ Montpellier, CNRS , INRA, Montpellier SupAgro, Montpellier, France)

  • Sandrine Costa

    (MOISA, Univ Montpellier, CIRAD, CIHEAM-IAMM, INRA, Montpellier SupAgro, Montpellier, France)

  • Gilles Grolleau

    (CEE-M, Univ Montpellier, CNRS, INRA, Supagro, Univ. Bourgogne, Burgundy School of Business-CEREN)

  • Lisette Ibanez

    (CEE-M, Univ Montpellier, CNRS , INRA, Montpellier SupAgro, Montpellier, France)

Abstract
We examine conditions for which positional preferences for voluntary contribution to a public good can be welfare enhancing in a one-shot public good game, where individuals may also enjoy a return from their contribution ranking. We show that positional preferences are welfare-increasing only under certain conditions. We find that when agents' positional preferences are homogeneous, they overinvest in the public good compared to equilibrium with no positional preferences, resulting in a zero-sum positional race with a higher public good provision. When agents have heterogeneous positional preferences, the overall impact on social welfare is positive when endowments are homogeneous.

Suggested Citation

  • Douadia Bougherara & Sandrine Costa & Gilles Grolleau & Lisette Ibanez, 2019. "Do positional preferences cause welfare gains?," Economics Bulletin, AccessEcon, vol. 39(2), pages 1228-1241.
    • Handle: RePEc:ebl:ecbull:eb-18-00362
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    References listed on IDEAS

    as
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    Cited by:

    1. Francisco Cabo & Alain Jean-Marie & Mabel Tidball, 2022. "Positional and conformist effects in public good provision. Strategic interaction and inertia," Post-Print hal-03947724, HAL.
    2. Francisco Cabo & Alain Jean-Marie & Mabel Tidball, 2022. "Positional effects in public good provision. Strategic interaction and inertia," Post-Print hal-03947632, HAL.

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    More about this item

    Keywords

    Position; Public goods; Status;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • D6 - Microeconomics - - Welfare Economics

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