The Resource Keeping up with the Medici! : three essays on social comparison, consumption and risk, Oege Dijk

Keeping up with the Medici! : three essays on social comparison, consumption and risk, Oege Dijk

Label
Keeping up with the Medici! : three essays on social comparison, consumption and risk
Title
Keeping up with the Medici!
Title remainder
three essays on social comparison, consumption and risk
Statement of responsibility
Oege Dijk
Creator
Contributor
Subject
Language
eng
Summary
This thesis investigates the influence of social comparison (i.e. comparing ones outcomes with others such as neighbours, colleagues, etc) on consumption and risk-taking. The first essay (joint with Robert H. Frank and Adam S. Levine) shows how income growth of the top ranks of the income distribution can decrease overall saving rates through a so-called expenditure cascade. As the higher incomes increase their consumption, those ranked below them also increase their consumption in order not to fall behind too much, which causes those ranked below them to increase consumption as well, etc. These consumption cascades can thus lower saving rates throughout the income distribution. We provide empirical evidence for this phenomenon by showing that several proxies related to financial distress (bankruptcy rates, divorce rates, commute times) are positively associated with increases in inequality. The second essay argues shows that social comparison can induce risk-taking. It shows that with comparison convex preferences social comparison would induce both more risk taking and a preference for negatively correlated gambles. With a laboratory experiment we show that although only a third of subjects display the preference for negatively correlated outcomes typical of comparison-convex utility, those subjects take a lot more risks in a social setting, resulting in significantly higher overall risk-taking. This would both explain the puzzling amount of portfolio under-diversification among households, as well as excessive risk-taking among financial professionals in the run-up to the financial crisis. Finally, the third essay experimentally investigates whether subjects focus on rank or social distance when comparing their outcomes. In the theoretical literature both specifications have been used. No support for a social rank effect is found, but a higher social reference point is found to be positively associated with more risky choices, thus lending credibility to the social distance utility hypothesis
Member of
Cataloging source
IT-FiEUI
http://library.link/vocab/creatorName
Dijk, Oege
Date time place
Defence date: 4 April 2012
Dissertation note
Thesis (Ph. D.)--European University Institute (ECO), 2012.
Index
no index present
Literary form
non fiction
Nature of contents
theses
http://library.link/vocab/relatedWorkOrContributorName
European University Institute
Series statement
  • EUI PhD theses
  • EUI theses
http://library.link/vocab/subjectName
Consumption (Economics)
Label
Keeping up with the Medici! : three essays on social comparison, consumption and risk, Oege Dijk
Link
http://hdl.handle.net/1814/21718
Instantiates
Publication
Note
Examining Board: Professor Pascal Courty, University of Victoria (External Supervisor); Professor Andrea Mattozzi, European University Institute; Professor Ed Hopkins, University of Edinburgh; Professor Matteo Ploner, University of Trento
Bibliography note
Includes bibliographical references (pages 87-88)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier.
Content category
text
Content type code
txt
Content type MARC source
rdacontent.
Control code
FIEb17090052
Dimensions
30 cm.
Extent
89 pages
Media category
unmediated
Media MARC source
rdamedia.
Media type code
n
Other physical details
illustrations
System control number
(OCoLC)1088466181
Label
Keeping up with the Medici! : three essays on social comparison, consumption and risk, Oege Dijk
Link
http://hdl.handle.net/1814/21718
Publication
Note
Examining Board: Professor Pascal Courty, University of Victoria (External Supervisor); Professor Andrea Mattozzi, European University Institute; Professor Ed Hopkins, University of Edinburgh; Professor Matteo Ploner, University of Trento
Bibliography note
Includes bibliographical references (pages 87-88)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier.
Content category
text
Content type code
txt
Content type MARC source
rdacontent.
Control code
FIEb17090052
Dimensions
30 cm.
Extent
89 pages
Media category
unmediated
Media MARC source
rdamedia.
Media type code
n
Other physical details
illustrations
System control number
(OCoLC)1088466181

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