Fashion and wealth accumulation

DOI10.1007/S001990050303MaRDI QIDQ1306646zbMATH OpenOpenAlexFDO

Authors Shou Yong Shi

Publication date 9 February 2001

Published in Economic Theory (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1007/s001990050303

zbMATH Keywords

fashionhabitslimit cycleswealth accumulation

Mathematics Subject Classification ID

Consumer behavior, demand theory (91B42)

Review text

This paper considers an economy with two groups of agents and models fashion as an externality generated by a dependence of individual agents' time preference on the two groups' per-capita consumption habits. In contrast to the earlier models of time preference, this paper postulates that an agent's discount rate depends only on per-capita consumption habits rather than on the agent's own consumption or habit. It is shown that stronger and more persistent fashion is more likely to generate limit cycles in wealth.

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Cited in

(7)

• Explaining fashion cycles: imitators chasing innovators in product space
• Learning by doing, endogenous discounting and economic development
• Preferences, endogenous discount rate, and indeterminacy in a small open economy model
• Conspicuous Consumption and Sophisticated Thinking
• Time preference and international trade
• Conspicuous consumption dynamics
• Impatience and equilibrium indeterminacy

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