Social Assets, Second Version

Abstract:     
We present a model incorporating both social and economic components, and analyze their interaction. The notion of a social asset, an attribute that has value only because of the social institutions governing society, is introduced. In the basic model, agents match on the basis of income and unproductive attributes. An attribute has value in some equilibrium social institutions (matching patterns), but not in others. We then show that productive attributes (such as education) can have their value increased above their inherent productive value by some social institutions, leading to the notion of the social value of an asset.

Note: A previous version of this paper can be found at: http://ssrn.com/abstract=305891

Keywords: Social assets, social capital, social arrangements, nonmarket interactions, social norms

JEL Classifications: D20, D31, D5, J41, Z13

Working Paper Series