EconStor >
Helmut-Schmidt-Universität (HSU), Hamburg >
Fächergruppe Volkswirtschaftslehre, Helmut-Schmidt-Universität (HSU) >
Diskussionspapiere, Fächergruppe VWL, Helmut-Schmidt-Universität >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/38721
  
Title:Questionable luxury taxes: Results from a mating game PDF Logo
Authors:Thomas, Tobias
Issue Date:2008
Series/Report no.:Diskussionspapier // Helmut-Schmidt-Universität Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre 86
Abstract: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 (iii) the price is located in very high or in middle range, demand collapses. With this, we explain the critical price from which a status good acts as a distinctive signal. In addition, this approach shows the potential welfare-improving impact of conspicuous consumption. Taking these results into account, recommendations by numerous economists to prevent the welfare losses of conspicuous consumption by introducing a luxury tax are highly questionable.
Subjects:luxury tax
conspicuous consumption
mating model
signaling game
status good
JEL:C70
Persistent Identifier of the first edition:urn:nbn:de:gbv:705-opus-17176
Document Type:Working Paper
Appears in Collections:Diskussionspapiere, Fächergruppe VWL, Helmut-Schmidt-Universität

Files in This Item:
File Description SizeFormat
586162429.pdf393.54 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/38721

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.