limited commitment and the demand for money understanding money demand is important for our comprehension of macroeconomics and monetary policy its instability has made this a challenge common explications for the instability are financial regulations and financial innovations that shift the money demand function we provide a complementary view by showing that a model where borrowers have limited commitment can significantly improve the fit between the theoretical money demand function and the data limited commitment can also explain why the ratio of credit to m1 is currently so low despite that nominal interest rates are at their lowest recorded levels this article is protected by copyright all rights reserved

money demand in japan and nonlinear cointegration we estimate the long run japanese money demand function in a cointegration framework with two nonlinear functional forms that allow for the liquidity trap and compare the results with the standard log level functional form in addition to the conventional linear cointegration techniques we also use a recently developed procedure for nonlinear cointegration that allows the estimation of alternative functional forms under the same assumption regarding the trend properties of the nominal interest rate the nonlinear functional forms outperform the log level functional form based on out of sample prediction performance

why democracies produce efficient results by applying the standard tools of microeconomic analysis i argue that democratic markets work as well as economic markets in particular i show that previous work has greatly exaggerated the existence of principal agent and informational problems in electoral markets and has drawn incorrect conclusions

made by mistake when mistakes increase product preference mistakes are often undesirable and frequently result in negative inferences about the person or company that made the mistake consequently research suggests that information about mistakes is rarely shared with consumers however we find that consumers actually prefer products that were made by mistake to otherwise identical products that were made intentionally this preference arises because consumers perceive that a product made by mistake is more improbable relative to a product made intentionally and thus view the product as more unique we find converging evidence for this preference in a field study six experiments and ebay auction sales importantly this preference holds regardless of whether the mistake enhances or detracts from the product however in domains where consumers do not value uniqueness e g utilitarian goods the preference is eliminated

capture by threat we analyze a simple stochastic environment in which policy makers can be threatened by nasty interest groups in the absence of these groups the policy maker s desire for reelection guarantees that good policies are implemented for every realization of the shock when pressure groups can harass the policy maker good policies will be chosen for only a subset of states of nature hence honest and able leaders might implement bad policies and needed reforms could be delayed in order to make good policies more likely the public will want to increase the cost of exerting pressure for nasty groups and provide rents to those in power this last result can be used to explain the existence of political parties they play a role resembling that of the supervisor in the literature on collusion in hierarchical agency a rational public may also choose to ignore negative media reports on a politician s personal life and in general elect strong political leaders the prevalence of coercive methods of infl

social exclusion causes people to spend and consume strategically in the service of affiliation when people s deeply ingrained need for social connection is thwarted by social exclusion profound psychological consequences ensue despite the fact that social connections and consumption are central facets of daily life little empirical attention has been devoted to understanding how belongingness threats affect consumer behavior in four experiments we tested the hypothesis that social exclusion causes people to spend and consume strategically in the service of affiliation relative to controls excluded participants were more likely to buy a product symbolic of group membership but not practical or self gift items tailor their spending preferences to the preferences of an interaction partner spend money on an unappealing food item favored by a peer and report being willing to try an illegal drug but only when doing so boosted their chances of commencing social connections overall results suggest that socially excluded people sacrifice personal and financial well being for the sake of social well being

inflation and welfare in a monetary economy it is in everyone s private interest to try to get someone else to hold non interest bearing cash and reserves but someone has to hold it all so these efforts must simply cancel out all of us spend several hours per year in this effort and employ thousands of talented and highly trained people to help us these person hours are simply thrown away wasted on a task that should not have to be performed at all

do direct democratic procedures lead to higher acceptance than political representation are direct democratic decisions more acceptable to voters than decisions arrived at through representative procedures we conduct an experimental online vignette study with a german sample to investigate how voters acceptance of a political decision depends on the process through which it is reached for a set of different issues we investigate how acceptance varies depending on whether the decision is the result of a direct democratic institution a party in a representative democracy or an expert committee our results show that for important issues direct democracy generates greater acceptance this finding holds particularly for those voters who do not agree with a collectively chosen outcome however if the topic is of limited importance to the voters acceptance does not differ between the mechanisms our results imply that a combination of representative democracy and direct democracy conditional on the distribution of issue importance among the electorate may be optimal with regard to acceptance of political decisions

generous paupers and stingy princes power drives consumer spending on self versus others this research examines how consumers spending on themselves versus others can be affected by temporary shifts in their states of power five experiments found that individuals experiencing a state of power spent more money on themselves than on others whereas those experiencing a state of powerlessness spent more money on others than on themselves this effect was observed using a variety of power manipulations hierarchical roles print advertisements episodic recall and mental role playing across spending intentions and actual dollars spent and among college and national samples we propose that this effect occurs because power and powerlessness affect the psychological utility of self versus others and this in turn affects the monetary worth allocated to spending on self versus others the research makes novel contributions to appreciating how the spending on the self versus others varies as a function of psychological states and increases our understanding of the role of power in consumer behavior

keynesian government spending multipliers and spillovers in the euro area the global financial crisis has led to a renewed interest in discretionary fiscal stimulus advocates of discretionary measures emphasize that government spending can stimulate additional private spending the keynesian multiplier effect thus we investigate whether the spending package announced by euro area governments for 2009 and 2010 is likely to boost gdp by more than one for one because of modelling uncertainty it is essential that such policy evaluations be robust to alternative modelling assumptions and parameterizations we use five different empirical macroeconomic models with keynesian features such as price and wage rigidities to evaluate the impact of the fiscal stimulus four of them suggest that the planned increase in government spending will reduce private consumption and investment significantly only a model that largely ignores the forward looking behavioural response of consumers and firms implies crowding in of private spending we review a range of issues that may play a role in the recession of 2008 2009 implementation lags are found to reinforce crowding out and may even cause an initial contraction zero bound effects may lead the central bank to abstain from interest rate hikes and increase the gdp impact of government spending crowding in however requires an immediate anticipation of at least two years at the zero bound using a multi country model we find that spillovers between euro area countries are negligible or even negative because direct demand effects are offset by the indirect effect of a euro appreciation new keynesian dynamic stochastic general equilibrium dsge models provide a strong case for government savings packages announced with sufficient lead time spending cuts induce a significant short run stimulus and crowding in of private spending tobias cwik and volker wieland

rational choice and turnout turning out to vote is the most common and important act of political participation in any democracy voting is also less well understood and explained empirically than other political acts engaged in regularly by citizens turnout however presents a special problem for rational choice theories of politics for it is taken to be the paradigmatic example of the problem of collective action in which although all may benefit from voting it is rarely in the individual s self interest to vote this paper begins by examining the problem of explaining turnout a basic form of rational choice models of turnout is developed basic in the sense that it is common to all such models this basic model is shown to be incomplete and the two most important models the calculus of voting and the minimax regret model are illustrated as alternative ways to complete this basic model along with mention of game theoretic models their strengths and weaknesses are then assessed the remainder of the paper argues that rational choice accounts of turnout are possible the first step is to argue that turnout is not an especially problematic version of the collective action problem because it is for many a low cost low expected benefit decision a strategic politicians account of turnout and campaigns is examined next a reinterpretation of the intrinsic benefits of voting is then considered and is used to examine the most important substantive problem in the turnout literature its decline these steps i argue make theories of ordinary political decisions at once both more political and more integrated into the politics of the larger system

the firm as a nexus of treaties part 1 knowledge its acquisition sharing and or asymmetry the participatory generation of information rents and the theory of the firm masahiko aoki common knowledge and the co ordination of economic activities jacques cremer profit sharing information and employment matti pohjola part 2 vertical integration and the strategic management of the enterprise what is vertical integration michael h riordan vertical integration transaction costs and learning by using kurt lundgren the firm as a nexus of internal and external contracts torger reve part 3 issues of labour organization the viability of worker ownership an economic perspective on the political structure of the firm henry hansmann intellectual skill and the role of employees as constituent members of large firms in contemporary japan kazuo koike the implicit contract for corporate law firm associates ex post opportunism and ex ante bonding robert h mooking part 4 finance and the political structure of the firm capital structure as a mechanism of control a comparison of financial systems erik berglof long term contracts in financial markets hakan lindgren the principle of external accountability in competitive markets herbert gintis union militancy and plant designs kar ove moene can transaction cost economics explain trade associations marc schneiberg and j rogers hollingsworth

money in the bank feeling powerful increases saving across five studies this research reveals that feeling powerful increases saving this effect is driven by the desire to maintain one s current state when the purpose of saving is no longer to accumulate money but to spend it on a status related product the basic effect is reversed and those who feel powerless save more further if money can no longer aid in maintaining one s current state because power is already secure or because power is maintained by accumulating an alternative resource i e knowledge the effect of feeling powerful on saving disappears these findings are discussed in light of their implications for research on power and financial decision making

financial deprivation prompts consumers to seek scarce goods consumers assess their well being subjectively largely by comparing the present state of their lives to the state of comparable others and to their own state earlier in time the authors suggest that consumers similarly assess their financial wellbeing and when these evaluations highlight a deficit in their financial position they pursue strategies that mitigate the associated sense of financial deprivation specifically consumers counteract the relative deficit in their financial resources by acquiring goods that are consequently unavailable to other consumers in their environment the results from five studies suggest that the inferiority and unpleasant affect associated with financial deprivation motivates consumers to attend to choose and consume scarce goods rather than comparable abundant goods these effects diminish when scarce goods are limited because other people have already obtained them and when consumers attribute their unpleasant feelings to a source unrelated to financial deprivation

money demand and the effects of fiscal policies this paper reexamines the choice of the scale variable in the money demand function a variety of evidence suggests that consumer spending is a better scale variable than gnp changing the money demand specification along these lines can profoundly affect the standard keynesian analysis of a tax cut copyright 1986 by ohio state university press

the industrial organization of congress or why legislatures like firms are not organized as markets this paper provides a theory of legislative institutions that parallels the theory of the firm and the theory of contractual institutions like market institutions legislative institutions reflect two key components the goals or preferences of individuals here representatives seeking reelection and the relevant transactions costs we present three conclusions first we show how the legislative institutions enforce bargains among legislators second we explain why given the peculiar form of bargaining problems found in legislatures specific forms of nonmarket exchange prove superior to market exchange third our approach shows how the committee system limits the types of coalitions that may form on a particular issue

money financed fiscal stimulus the effects of implementation lag abstract previous studies argue that based on the new keynesian framework a fiscal stimulus financed by money creation has a strong positive effect on output under a reasonable degree of nominal price rigidities this paper investigates the effects of an implementation lag in a money financed fiscal stimulus on output we show that if a money financed government purchase has a time lag between the decision and the implementation 1 it may cause a recession rather than a boom when the economy is in normal times 2 it may deepen a recession when the economy is in a liquidity trap 3 the longer the implementation lag the deeper the recession and 4 the depth of the recession depends on the interest semi elasticity of money demand our results imply that if money demand is unstable the money financed fiscal stimulus with an implementation lag may have unstable effects on output in contrast to the debt financed fiscal stimulus

quantifying tax effects under policy foresight abstract studies of tax effects make the conventional information assumption that changes in period t taxes become known at t legislative lags however imply that news arrives before tax changes take place under policy foreknowledge the conventional information structure is therefore misspecified simulations of a standard neoclassical growth model suggest that foresight of only one quarter can distort substantially the estimates of tax effects obtained under the no foresight assumption also it is crucial to model capital and labor taxes separately anticipated changes in these two tax policies have opposite effects on consumption investment labor and output before policy realization

government investment and fiscal stimulus effects of government investment are studied in an estimated neoclassical growth model the analysis focuses on two dimensions that are critical for understanding government investment as a fiscal stimulus implementation delays for building public capital and expected fiscal adjustments to deficit financed spending implementation delays can produce small or even negative labor and output responses to increases in government investment in the short run anticipated fiscal adjustments matter both quantitatively and qualitatively for long run growth effects when public capital is insufficiently productive distorting financing can make government investment contractionary at longer horizons

the impact of private versus public consumption on variety seeking behavior three experiments demonstrate that people incorporate more variety into their consumption decisions when their behavior is subject to public scrutiny studies 1 and 2 indicate that consumers expect others to evaluate their decision more favorably if they choose variety and that this sometimes leads individuals to incorporate more variety into their public than private decisions results of study 2 confirm predictions that a relevant individual difference variable self monitoring moderates the effects of expected evaluation on variety seeking the final study demonstrates that pressure to choose variety in public is eliminated when a social cue signals the appropriateness of consuming one s favorites

on the welfare cost of inflation and the recent behavior of money demand post 1980 u s data trace out a stable long run money demand relationship of cagan s semi log form between the m1 income ratio and the nominal interest rate with an interest semi elasticity of 1 79 integrating under this money demand curve yields estimates of the welfare cost of modest departures from friedman s zero nominal interest rate rule for the optimum quantity of money that are quite small the results suggest that the federal reserve s current policy which generates low but still positive rates of inflation provides an adequate approximation in welfare terms to the alternative of moving all the way to the friedman rule jel e31 e41 e52

feeling economically stuck the effect of perceived economic mobility and socioeconomic status on variety seeking five studies provide converging evidence for the joint effect of perceived economic mobility and socioeconomic status ses on compensatory behavior such that low ses consumers who perceive low economic mobility i e economically stuck consumers seek more variety than other consumers we trace this effect to these consumers desire to compensate for their low sense of personal control furthermore we show that these consumers variety seeking tendency disappears when their sense of control is boosted by other means or when the more varied option is not associated with a sense of control alternative explanations based on instrumental benefits reactance and affect were tested and did not account for the effect thus the current research provides fresh insights to consumer research by contributing to the literature on compensatory behavior variety seeking and ses

party competition in a heterogeneous electorate the role of dominant issue voters this paper provides a theoretical model of party competition in a heterogeneous electorate the latter consists of numerous groups of dominant issue voters who base their voting decision primarily on one issue of the political agenda parties follow a lexicographic objective function aiming to gain power at minimum programmatic concessions the emerging pattern of movement in policy platforms is fundamentally different to the concept of convergence proposed by the spatial theory of voting rather than the centre of the scale of policy preference its extreme ends occupied by dominant issue voters attract the policy platforms the difference in policy platforms is not reduced the conclusions are found to be compatible with some major empirical findings of the manifesto research group

unconventional fiscal policy at the zero bound when the zero lower bound on nominal interest rates binds monetary policy cannot provide appropriate stimulus we show that in the standard new keynesian model tax policy can deliver such stimulus at no cost and in a time consistent manner there is no need to use inecient policies such as

the effects of a money financed fiscal stimulus abstract i analyze the effects of a money financed fiscal stimulus and compare them with those resulting from a conventional debt financed stimulus i study the effects of both a tax cut and an increase in government purchases with and without a binding zero lower bound zlb on the nominal interest rate when the zlb is not binding a money financed fiscal stimulus is shown to have much larger multipliers than a debt financed fiscal stimulus that difference in effectiveness persists but is much smaller under a binding zlb nominal rigidities are shown to play a major role in shaping those effects

the political trend in local government tax setting previous fiscal studies have paid little attention to the effects of social interaction on local tax setting this paper seeks to fill this gap by developing a theoretical model in which politicians belonging to the same party interact with each other in order to draw inferences about ideology this phenomenon produces a mimic effect which is called the political trend the results of the analysis show that the political trend gives rise to higher income tax rates and to tax mimicking at the local government level the framework developed also makes it possible to discriminate between leviathan type and welfarist type politicians the results show that the former are more sensitive than the latter to changes in the average income tax rate of their peers moreover leviathan type politicians are less sensitive than benevolent ones to changes in the central government s income tax rate

super size me product size as a signal of status this research proposes that consumers preference for supersized food and drinks may have roots in the status signaling value of larger options an initial experiment found that consumers view larger sized options within a set as having greater status because low power consumers desire status we manipulated power to test our core propositions whether induced in the lab or in the field states of powerlessness led individuals to disproportionately choose larger food options from an assortment furthermore this preference for larger sized options was enhanced when consumption was public reversed when the size to status relationship was negative i e smaller was equated with greater status and mediated by consumers need for status this research demonstrates that choosing a product on the basis of its relative size allows consumers to signal status illustrates the consequences of such a choice for consumers food consumption and highlights the central role of a product category s size to status r

using repeat challengers to estimate the effect of campaign spending on election outcomes in the u s house previous studies of congressional spending have typically found a large positive effect of challenger spending but little evidence for effects of incumbent spending those studies however do not adequately control for inherent differences in vote getting ability across candidates high quality challengers are likely to receive a high fraction of the vote and have high campaign expenditures even if campaign spending has no impact on election outcomes to avoid that bias this paper examines elections in which the same two candidates face one another on more than one occasion differencing eliminates the influence of any fixed candidate or district attributes estimates of the effects of challenger spending are an order of magnitude below those of previous studies campaign spending has an extremely small impact on election outcomes regardless of who does the spending campaign spending limits appear socially desirable but public financing of campaigns does not

towards a positive theory of political rhetoric why do politicians lie this paper presents a model in which politicians can increase the probability of election by making exaggerated claims about the benefits of their own platform referred to as positive campaigning and by exaggerating the undesirable characteristics of their rival i e negative campaigning such lies may be detected at some point in the future and thus result in a costly loss in reputation thus the politician must tradeoff immediate benefits against potential future costs of course this problem is similar to any commercial endeavor a car maker for example is tempted to claim that his car is better and the competition s is worse than it is but it is shown that the lack of transferable property rights to political office makes lying more likely in political markets it is also shown that there is a natural tendency for politicians to engage in more negative campaigning

the impact of option popularity social inclusion exclusion and self affirmation on consumers propensity to choose green hotels previous research on consumers willingness to choose a green hotel has yielded mixed results with some studies indicating a positive relationship with the hotel s csr initiatives while others suggesting that there is no booking advantage for hotels going green the present research seeks to understand the social nature of green hotel booking decisions and proposes a conceptual framework elucidating three primary factors that underlie consumers propensity to choose a green hotel the study findings indicate that importantly a consumer s social relationship situation social inclusion vs social exclusion with other consumers self affirmation self value self concept reinforcement and the option popularity jointly influence consumers willingness to choose a green hotel the authors adopt a 2 2 2 factorial experimental design to test the proposed hypotheses theoretical and managerial implications are discussed

are two better than one bargaining behavior and outcomes in an asymmetrical power relationship many consumer transactions are characterized by bargaining between parties holding unequal power positions the group polarization hypothesis suggests that the effects of group size will differ for high and low power bargainers accordingly power position and size of bargaining unit one two were manipulated in a threat vulnerable 2 2 game factor effects on economic performance communication style and post bargaining attitudes were examined at the unit and system levels supporting the group polarization hypothesis two person groups tend to magnify the power manipulation i e group size interacts with power position on post bargaining attitudes and system performance

transaction costs markets and hierarchies 1 transaction costs markets and hierarchies christos pitelis university of cambridge 2 the nature and role of markets malcolm sawyer university of leeds 3 in the beginning there were markets frederick fourie university of the dfs south africa 4 control markets and firms keith cowling and robert sugden university of birmingham 5 transaction costs and the evolution of the firm geoffrey hodgson newcastle polytechnic 6 the appropriability critique of transaction cost economics gregory dow university of alberta canada 7 power and efficiency in the firm paul marginson university of warwick 8 transaction costs and revenues michael dietrich newcastle polytechnic 9 transaction cost economics and the state william dugger depaul university chicago 10 markets hierarchies and markets again steve thompson and mike wright university of manchester and university of nottingham 11 markets false hierarchies and the role of asset specificity neil kay university of strathclyde 12 on transactions costs and markets and as hierarchies christos pitelis university of cambridge

optimal monetary policy at the zero interest rate bound what should a central bank do when faced with a weak aggregate demand even after reducing the short term nominal interest rate to zero to address this question we solve a central bank s intertemporal loss minimization problem in which the non negativity constraint on nominal interest rates is explicitly considered we find that the optimal path is characterized by policy inertia in the sense that a zero interest rate policy should be continued for a while even after the natural rate of interest returns to a positive level by making such a commitment the central bank is able to achieve higher expected inflation lower long term nominal interest rates and a weaker domestic currency in the adverse periods when the natural rate of interest significantly deviates from a steady state level

on the stability of money demand abstract we show that regulatory changes that occurred in the banking sector in the early 1980s that considerably weakened regulation q can explain the apparent instability of money demand starting in the same period we evaluate the effects of the regulatory changes using a model that goes beyond aggregates as m1 and treats currency and different deposit types as alternative means of payments we use the model to construct a new monetary aggregate that performs remarkably well for all the period 1915 2012

explaining the endowment effect through ownership the role of identity gender and self threat the price people are willing to pay for a good is often less than the price they are willing to accept to give up the same good a phenomenon called the endowment effect loss aversion has typically accounted for the endowment effect but an alternative explanation suggests that ownership creates an association between the item and the self and this possession self link increases the value of the good to test the ownership account this research examines three moderators that theory suggests should affect the possession self link and consequently the endowment effect self threat identity associations of a good and gender after a social self threat the endowment effect is strengthened for in group goods among both men and women but is eliminated for out group goods among men but not women these results are consistent with a possession self link explanation and therefore suggest that ownership offers a better explanation for the endowment effect

is there a fiscal free lunch in a liquidity trap this paper uses a dsge model to examine the eects of an expansion in government spending in a liquidity trap the spending multiplier can be much larger than in the normal situation if the liquidity trap is very persistent and scal stimulus can be rapidly implemented moreover the budgetary costs may be minimal as the large response of output boosts tax revenues allowing for something close to a scal free lunch however we caution that the multiplier may be much smaller under plausible implementation lags for many types of public spending and or if the liquidity trap lasts less than two years in addition because the marginal impact of scal expansion decreases in the scale of the outlay it is crucial to distinguish between average and marginal multipliers

party cues in elections under multilevel governance theory and evidence from us states this is the authors accepted refereed and final manuscript to the article the final publication is available at www elsevier com

influence of perceived value on purchasing decisions of green products in brazil abstract research on behavioral motivation for green product consumption has greatly advanced in recent years but many unknowns remain particularly regarding consumers willingness to pay premium prices for products with ecological appeal in this context this paper reports an experimental research that investigates the relationship between consumer perceived value for green products and price elasticity the research was performed using an adaptation of the model proposed by zeithaml 1988 and it was applied in the automotive and furniture sectors it was found that perceived value of green products increases willingness to pay in the purchasing decision it was also observed that demographical variables such as gender age and revenue positively impact perceived quality and the consequent purchase intention considering the population sampled results indicate that the effect of ecological appeal is similar to a 10 price reduction it means that according to the declared preference respondents were willing to pay on average a 10 premium for green products in the studied product categories the main theoretical contribution of our paper lies in furthering the understanding of how key dimensions that constitute perceived value relate to each other and to demographic and personal influence variables as well as its impact in willingness to pay premium prices for green products

the role of political parties an analysis based on transaction costs this paper explores the proposition that political parties reduce the transaction costs of electoral participation political parties provide a low cost signal of a candidate s policies and personal characteristics and in this way reduce voters information costs with reference to transaction cost economics political parties offer an implicit contract between voters and politicians and thereby reduce the scope for opportunism by politicians this impact on transaction costs is important in any evaluation of public policy towards political parties

on inflation and output with costly price changes a simple unifying result this paper determines the real effects of credible disinflation when price setting is staggered the results are surprising a fairly quick disinflation causes a boom this finding suggests that nominal price rigidity alone does not explain why disinflation is costly in actual economies this abstract was borrowed from another version of this item

the effect of stress on consumer saving and spending abstractin examining how stress influences consumer saving and spending the authors propose that consumers who experience a stressful situation allocate their resources strategically to gain control of their environment a series of studies shows that this strategic allocation of resources occurs in two ways consumers experiencing stress may show increased saving behavior which assures them that monetary resources will be available when needed alternatively consumers experiencing stress may show increased spending behavior directed specifically toward products that the consumer perceives to be necessities and that allow for control in an otherwise uncontrollable environment this conceptualization and the related findings can inform assessments of when stress will lead to beneficial or impulsive consumer behaviors

money demand function estimation by nonlinear cointegration conventionally the money demand function is estimated using a regression of the logarithm of money demand on either the interest rate or the logarithm of the interest rate this equation is presumed to be a cointegrating regression in this paper we aim to combine the logarithmic specification which models the liquidity trap better than a linear model with the assumption that the interest rate itself is an integrated process the proposed technique is robust to serial correlation in the errors for the usa our new technique results in larger coefficient estimates than previous research suggested and produces superior out of sample prediction copyright 2007 john wiley sons ltd

desire to acquire powerlessness and compensatory consumption three experiments examine how power affects consumers spending propensities by integrating literatures suggesting that a powerlessness is aversive b status is one basis of power and c products can signal status the authors argue that low power fosters a desire to acquire products associated with status to compensate for lacking power supporting this compensatory hypothesis results show that low power increased consumers willingness to pay for auction items and consumers reservation prices in negotiations but only when products were status related the link between powerlessness and compensatory consumption has broad implications both for consumers health and well being and for understanding the psychological state of power

getting ahead of the joneses when equality increases conspicuous consumption among bottom tier consumers it is widely believed that increasing the equality of material possessions or income in a social group should lead people at the bottom of the distribution to consume less and save more however this prediction and its causal mechanism have never been studied experimentally five studies show that greater equality increases the satisfaction of those in the lowest tier of the distribution because it reduces the possession gap between what they have and what others have however greater equality also increases the position gains derived from status enhancing consumption since it allows low tier consumers to get ahead of the higher proportion of consumers clustered in the middle tiers as a result greater equality reduces consumption when consumers focus on the narrower possession gap but it increases consumption when they focus on the greater position gains i e when consumption is conspicuous social competition goals are primed and the environment is competitive

powering sustainable consumption the roles of green consumption values and power distance belief as human consumption is one of the key contributors to environmental problems it is increasingly urgent to promote sustainable consumption drawing on the agentic communal model of power this research explores how the psychological feeling of power influences consumers preference for green products we show that low power increases consumers preference for green vs conventional products compared to high power studies 1a and 1b importantly we identify two factors moderating the main effect of power on green consumption specifically we find that the effect of power on green consumption is more salient among those with high green consumption values study 2 in addition the effects of power are dynamic as a function of power distance belief pdb such that low power vs high power promotes green consumption in the low pdb context while high power vs low power promotes green consumption in the high pdb context study 3 taken together these findings provide novel insights into understanding green consumption from the perspectives of social power green values and pdb besides contributing to the literature the findings have significant implications for marketers and policy makers in promoting green campaigns bridging the attitude behavior gap and building a more sustainable society