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Solidarity in Consumption

29 Pages Posted: 3 May 2000  

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Edna Ullmann-Margalit

Hebrew University of Jerusalem - Center for the Study of Rationality

Date Written: April 28, 2000

Abstract

Contrary to a common picture of relationships in a market economy, people often express communal and membership-seeking impulses via consumption choices, purchasing goods and services because other people are doing so as well. Shared identities are maintained and created in this way. Solidarity goods are goods whose value increases as the number of people enjoying them increases. Exclusivity goods are goods whose value decreases as the number of people enjoying them increases. Distinctions can be drawn among diverse value functions, capturing diverse relationships between the value of goods and the value of shared or unshared consumption. Though markets spontaneously produce solidarity goods, individuals sometimes have difficulty in producing such goods on their own, or in coordinating on choosing them. Here law has a potential role. There are implications for trend setting, clubs, partnerships, national events, social cascades, and compliance without enforcement.

JEL Classification: K, K32, K42

Suggested Citation

Sunstein, Cass R. and Ullmann-Margalit, Edna, Solidarity in Consumption (April 28, 2000). University of Chicago Law School, John M. Olin Law & Economics Working Paper No. 98. Available at SSRN: https://ssrn.com/abstract=224618 or http://dx.doi.org/10.2139/ssrn.224618

Cass R. Sunstein (Contact Author)

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Edna Ullmann-Margalit

Hebrew University of Jerusalem - Center for the Study of Rationality ( email )

Feldman Building
Givat-Ram
Jerusalem, 91904
Israel
972-26513681 (Fax)

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