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Title:Competition and well-being: Does market competition make people unhappy? PDF Logo
Authors:Fischer, Justina A. V.
Issue Date:2008
Series/Report no.:SSE/EFI Working Paper Series in Economics and Finance 697
Abstract:Empirical research on the role of economic institutions for subjective well-being is still widely lacking, while recent economic-experimental outcomes suggest that experienced utility may depend on the intensity of market competition. This paper is the first to empirically analyze the implication of market competition for subjective well-being using real-life survey data on 80,000 individuals in more than 60 countries from the World Values Survey 1997-2001. In support of our hypothesis, we find that market competition aggravates the impact of individual's bargaining position in economic transactions on her subjective well-being - compared to the least powerful in society. Put differently, we find that market competition enlarges the happiness differences caused by cleavages in socio-economic position. Our results also suggest that competition induced welfare changes are not gender-specific, while a stronger rule of law appears to prevent the generation of such additional benefits or losses. Particularly the latter results call for further economic-experimental corroboration in the laboratory, but also bear important policy implications.
Subjects:Subjective well-being
happiness
utility
competition
rule of law
completeness of contract
laboratory experiment
World Values Survey
JEL:C99
D02
D40
I31
Document Type:Working Paper
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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