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Conspicuous consumption of luxuries plays a central role in the work of Thorstein B. Veblen. More recently, interpersonal effects have emerged as an important factor in consumption theory. However, the inadequate modelling of individuals interaction often leads to questionable results with...
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Signaling models of esteem have implications for peer pressure. Using Bénabou's and Tirole's "honor-stigma" model, we analyze how the pressure to engage in costly signaling changes with the distribution of peers' attributes. In particular, we provide novel comparative statics on the effects of...
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We analyze the impact of trust on bargaining behavior between auditor and auditee in a tax setting. We study the effect … of interpersonal trust and trust in government on both taxpayer and tax auditor. In an experiment with variation in …. While trust in government increases taxpayers’ tax offers, trust in government may lead to more concessionary behavior of …
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