A theory of esteem based peer pressure

Adriani, Fabrizio; Sonderegger, Silvia

Abstract

How does the incentive to engage in social signaling depend on the composition of peers? We find that an increase in the mean peer quality may either strengthen signaling incentives (keeping up with the Joneses) or weaken them (small fish in a big pond). Both right and left truncations of the distribution of peer quality reduce signaling incentives, while more dispersed peer distributions strengthen them. Finally, more right skewed peer distributions strengthen signaling incentives when only a small fraction of the group engage in signaling, but weaken them when signaling is widespread. JEL Codes: D82

Citation

Adriani, F., & Sonderegger, S. (2019). A theory of esteem based peer pressure. Games and Economic Behavior, 115, 314-335. https://doi.org/10.1016/j.geb.2019.03.010

• Journal Article Type: Article
• Acceptance Date: Apr 30, 2019
• Online Publication Date: Mar 26, 2019
• Publication Date: 2019-05
• Deposit Date: Jul 18, 2019
• Publicly Available Date: Sep 27, 2020
• Journal: Games and Economic Behavior
• Print ISSN: 0899-8256
• Electronic ISSN: 1090-2473
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 115
• Pages: 314-335
• DOI: https://doi.org/10.1016/j.geb.2019.03.010
• Keywords: Esteem; Status; Peer pressure; Signaling; Small fish in a big pond; Conspicuous consumption; Distributional comparative statics
• Public URL: https://nottingham-repository.worktribe.com/output/2320095
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0899825619300454
• Additional Information: This article is maintained by: Elsevier; Article Title: A theory of esteem based peer pressure; Journal Title: Games and Economic Behavior; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.geb.2019.03.010; Content Type: article; Copyright: © 2019 Elsevier Inc. All rights reserved.