Status Goods and Market Powers
Publication in refereed journal


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ÊýλÎï¼þʶ±ðºÅ (DOI) http://dx.doi.org/10.1111/geer.12065

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Web of Sciencehttp://aims.cuhk.edu.hk/converis/portal/Publication/0WOS source URL

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ÕªÒªStatus goods are often produced by firms with market powers. Taking this into account, we construct a new class of models of status goods, which refutes many important results in the conventional models without assuming market powers. Specifically, relative consumption effect normally leads to under-consumption of status goods, which is the opposite of the conventional result. Generally speaking, status goods may be over- or under-consumed, depending crucially on a widely overlooked factor in the literature - the elasticity of marginal status. More competition tends to support overconsumption and is not necessarily welfare-enhancing. Our results call into questions if, as often suggested in existing literature, a general taxation is an appropriate solution to tackle market bias from status seeking.

×ÅÕßWoo WC
ÆÚ¿¯Ãû³ÆGerman Economic Review
ÏêϸÃèÊöTo ORKTS: Article first published online on 12 January 2http://aims.cuhk.edu.hk/converis/portal/Publication/015; hard copy published on February 2http://aims.cuhk.edu.hk/converis/portal/Publication/016 in Volume 17, Issue 1, pages 26¨C35 of German Economi
³ö°æÄê·Ý2http://aims.cuhk.edu.hk/converis/portal/Publication/016
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µç×Ó¹ú¼Ê±êœÊÆÚ¿¯ºÅ1468-http://aims.cuhk.edu.hk/converis/portal/Publication/0475
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¹Ø¼ü´Êmarket power; relative consumption effect; Status good
Web of Science ѧ¿ÆÀà±ðBusiness & Economics; Economics