"A number of studies have examined the implications of preference interdependence. This paper models utility as depending on other people's consumption levels and shows that welfare declines with inequality, equilibrium inequality is inefficient, and the optimal intervention leads to a more...

This paper studies monopolistic third-degree price discrimination incorporating consumers' fairness concerns: Discriminatory pricing antagonizes consumers and may reduce their demand. In contrast to previous studies, we show that consumers' concerns about price inequity may deter discriminatory...

This contribution provides a game theoretical derivation of market demand as a function of the level and distribution of income in the considered economy: if (i) the price is low, everyone buys the good; if (ii ) the price is high, only the rich buy the good (a status good in a narrow sense). If...

We analyze the effects of a generalized class of negative consumption externalities (asymmetric and non-atmospheric) on the structure of efficient commodity tax programs. Households are not only concerned about consumption reference levels --- that is, they gain utility from "keeping up with the...

We analyze the effects of a generalized class of negative consumption externalities (asymmetric and non-atmospheric) on the structure of effcient commodity tax programs. Households are not only concerned about consumption reference levels - that is, they gain utility from "keeping up with the...

I develop a model of conspicuous consumption to empirically measure the importance of peer beliefs to Americans and Chinese. In the model, a consumer cares not only about the direct utility she receives from consumption, but also about the way her consumption pattern affects her peer group's...