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A social-status rationale for repugnant market transactions

Published online by Cambridge University Press:  31 January 2023

Patrick Harless
Affiliation:
Department of Political Economy and Moral Sciences, University of Arizona, 1145 E. South Campus Dr., Tucson, Arizona, AZ85721, USA
Romans Pancs*
Affiliation:
Department of Economics, ITAM, Av. Camino a Santa Teresa #930 Col. Héroes de Padierna CP., Alc. Magdalena Contreras, Ciudad de México, 10700, Mexico
*
*Corresponding author. Email: rpancs@gmail.com

Abstract

Individuals often deem market transactions in sex, human organs and surrogacy, among others, repugnant. Repugnance norms can be explained by appealing to social-status concerns. We study an exchange economy in which agents abhor consumption dominance: one’s social status is compromised if one consumes less of every good than someone else does. Dominance may be forestalled by partitioning goods into submarkets and then invoking the repugnance norms that proscribe trade across these submarkets. Dominance may also be forestalled if individuals strategically ‘overconsume’ some goods, interpreted as emergent status goods. When equilibria are multiple, there is scope for welfare-enhancing policies that coordinate on status goods.

Type
Article
Copyright
© The Author(s), 2023. Published by Cambridge University Press

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Footnotes

Patrick died suddenly in December 2020. He was forty.

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