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Title:Choosing the Joneses : Endogenous Goals and Reference Standards PDF Logo
Authors:Knell, Markus
Falk, Armin
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1152
Abstract:A growing economic literature stresses the importance of relative comparisons, e.g., for savings and consumption or happiness. In this literature it is usually assumed that reference standards against which people compare themselves are exogenously given. In contrast findings from social psychology suggest that people play an active role in determining their reference standards. We present a social comparison model where people choose their reference standards to serve motives of self-improvement and self-enhancement. The model predicts that reference standards increase in individuals? abilities and that thus people tend to compare themselves to similar others. The results of a questionnaire study confirm the model?s prediction.
Subjects:reference standard
goals
social comparison
happiness
JEL:Z13
D62
D63
H31
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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