A Social-Status Rationale for Repugnant and Protected Market Transactions

48 Pages Posted: 31 Jul 2018 Last revised: 19 Oct 2018

See all articles by Patrick Harless

Patrick Harless

University of Glasgow

Romans Pancs

ITAM, Centro de Investigación Económica

Date Written: October 10, 2018

Abstract

Individuals deem repugnant and societies proscribe market transactions in sex, organs, and surrogacy — despite potential gains from trade. We resolve this tension by observing that repugnance norms help status-conscious individuals. We study an exchange economy in which agents abhor consumption dominance: one loses social status if another consumes more of every good. Repugnance norms forestall dominance by partitioning goods into submarkets and proscribing trade across submarkets. With multiple equilibria, there is scope for coordinating on, or protecting, status goods.

Keywords: repugnant transactions, protected transactions, social status, market design

JEL Classification: D02, D47, D50, D63, D62

Suggested Citation

Harless, Patrick and Pancs, Romans, A Social-Status Rationale for Repugnant and Protected Market Transactions (October 10, 2018). Available at SSRN: https://ssrn.com/abstract=3212529 or http://dx.doi.org/10.2139/ssrn.3212529

Patrick Harless

University of Glasgow ( email )

Adam Smith Business School, Gilbert Scott Building
235D East Quadrangle
Glasgow, NY G12 8QQ
United Kingdom
1413306467 (Phone)

HOME PAGE: http://https://sites.google.com/site/pdharless/

Romans Pancs (Contact Author)

ITAM, Centro de Investigación Económica ( email )

Camino a Santa Teresa No. 930
Col. Héroes de Padierna
Ciudad de México
Mexico

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