Social status in a social structure: noisy signaling in networks

How do incentives to engage in costly signaling depend on social structure? This paper formalises and extends Thorstein Veblen’s theory of how costly signaling by conspicuous consumption depends on social structure. A noisy signaling game is introduced in which spectators observe signals only imperfectly, and use Bayesian updating to interpret the observed signals. It is shown that this noisy signaling game has (under some weak regularity conditions) a unique plausible Perfect Bayesian Nash equilibrium. Then, a social information network is introduced as a second source of information about a player’s type. Equilibrium signaling depends in the resulting game on the relative quality of the substitute sources of information, which depends again on the social network. For some highly stylised networks, the dependence of equilibrium costly signaling on network characteristics (network size, density and connectedness, the centrality of the consumer in the network) is studied, and a simple dominance result for more arbitrary networks is suggested.

Signaling and indirect taxation

Commodities communicate. Consumers choose a consumption bundle both for its intrinsic characteristics and for what this bundle communicates about their qualities (or .identity.) to spectators. We investigate optimal indirect taxation when consumption choices are motivated by two sorts of concerns: intrinsic consumption and costly signaling. Optimal indirect taxes are introduced into a monotonic signaling game with a finite typespace of consumers. We provide sufficient conditions for the uniqueness of the D1 sequential equilibrium in terms of strategies. In the case of pure costly signaling, signaling goods can in equilibrium be taxed without burden and the optimal quantity taxes on these goods are infinite. When commodities serve both intrinsic consumption and signaling, optimal taxes can be characterized by a generalization of the Ramsey rule, which also deals with the distortions resulting from signaling.Optimal Taxation, Indirect Taxation, Costly Signaling, Identity.

Social status in economic theory: a review.

Social distinction or status is an important motivation of human behaviour. This paper provides a selective survey of recent advances in the economic analysis of the origins and consequences of social status. First, a selection of empirical research from a variety of scientific disciplines is discussed to underpin the further theoretical analysis. I then consider the origins and determinants of tastes for status, discuss the endogenous derivation of such a preferences for relative standing and assess the different formalisations these preferences. Subsequently, the consequences of preferences for status are studied for a variety of problems and settings. The last section discusses a number of implications of status concerns for normative economics and public policy.

A re-evaluation of ideas, interests and politics in repeal: the case of the Belgian Corn Laws, 1834-1873.

Economic interests, the influence of economic ideas and politics have been put forward in the literature as explanations for the British Repeal of the Corn Laws in 1846. In this paper, we will evaluate these competing explanations using the case of the liberalization of Belgian corn tariffs. The Belgian protectionist Corn Laws of 1834 were abolished in different steps between 1845 and 1873. The first part of this paper uses quantitative methods to assess the success of party affiliation, personal interests and the economic profile of the constituencies in predicting voting behavior. Thanks to the detailed censuses of 1846 on agriculture, industry and population, it is possible to typify the economic make-up of the electoral districts in much more detail than in the British case. However, the analysis of roll-call voting proves that party affiliation and personal and constituency economic interests are insufficient to explain the shift towards free trade. The second part of the paper then discusses the role played by political strategy and ideas in the liberalization of corn tariffs, using a qualitative analysis of the debates on tariff policy. The large number of votes over a forty year period allows us to document the relationship between ideas and interests in a new way.

Entry in first-price auctions with signaling

We study the optimal entry fee in a symmetric private value first-price auction with signaling, in which the participation decisions and the auction outcome are used by an outside observer to infer the bidders’ types. We show that this auction has a unique fully separating equilibrium bidding function. When the bidders’ sensibility for the signaling concern is sufficiently strong, the expected revenue maximizing entry fee is the maximal fee that guarantees full participation. The larger is the bidder’s sensibility, the higher is the optimal participation

Auctions with Signaling Concerns

We study a symmetric private value auction with signaling, in which the auction outcome is used by an outside observer to infer the bidders' types. We elicit conditions under which an essentially unique D1 equilibrium bidding function exists in four auction formats: first-price, second-price, all-pay and the English auction. We obtain a strict ranking in terms of expected revenues: the first-price and all-pay auctions dominate the English auction but are dominated by the second-price auction

Auctions with Signaling Concerns

We study a symmetric private value auction with signaling, in which the auction outcome is used by an outside observer to infer the bidders' types. We elicit conditions under which an essentially unique D1 equilibrium bidding function exists in four auction formats: first-price, second-price, all-pay and the English auction. We obtain a strict ranking in terms of expected revenues: the first-price and all-pay auctions dominate the English auction but are dominated by the second-price auction

Signalling in auctions: experimental evidence

We study the relative performance of the first-price sealed-bid auction, the second-price sealed-bid auction, and the all-pay sealed-bid auction in a laboratory experiment where bidders can signal information through their bidding behaviour to an outside observer. We consider two different information settings: the auctioneer reveals either the identity of the winning bidder only, or she also reveals the bidders’ payments to an outside observer. We find that the all-pay sealed-bid auction in which the bidders’ payments are revealed outperforms the other mechanisms in terms of revenue, while this mechanism underperforms in terms of efficiency relative to the winner-pay auctions

Voitures de société et mobilité durable. Diagnostic et enjeux

La voiture de société est, sans aucun doute, un des avantages de toute nature (ATN) les plus fréquemment proposés par les entreprises à leurs employés. Combien compte-t-on de voitures de société en Belgique ? Quels sont les profils des usagers ? Et quels sont les impacts sociétaux, environnementaux et économiques de cet « avantage »