Efficient status seeking: Externalities, and the evolution of status games

Abstract Status-seeking games are games in which an individual's utility is determined by his relative expenditure on status-seeking activities rather than his absolute consumption. There are a number of parallels between status-seeking and rent-seeking activities, for example, a tendency for Pareto excessive private investment. However, many status-seeking activities differ from rent-seeking activities insofar as they generate significant benefits to individuals not actively involved in the game. Given an array of more or less productive status-seeking games, it is likely that relatively efficient status conferring mechanisms will tend to displace less efficient ones.

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