Barnett, Richard C.; Bhattacharya, Joydeep; Bunzel, Helle - Department of Economics, Iowa State University - 2008
This note studies a model in which heterogeneous income agents get a utility boost only when their consumption catches up with the Joneses'. The resulting utility function is non-concave. In this setup, participation in a fair consumption lottery has the potential to make some agents ex-ante...