On the Feasibility of Power and Status Ranking in Traditional Setups

Abstract

This paper aims at a better understanding of the conditions under which unequal rank or power positions may get permanently established through asymmetric gift exchange when a gift brings pride to the donor and shame to the recipient. The central result obtained is that an asymmetric gift exchange equilibrium can occur only if the importance attached to social shame by a recipient is smaller than that attached to social esteem by a donor. Moreover, an income transfer is more likely to be traded against social esteem, status, or power when the weight put on these attributes by the donor or patron is higher. We also show that the recipient's productivity may take on a rather wide range of values in the domain of feasibility of asymmetric gift exchange, and that, contrary to a commonly prevailing view, it is even possible that his productivity would be identical to that of the donor. Finally, the conditions are spelt out under which the recipient's effort is more likely to be reduced upon entering into asymmetric gift exchange relationships.

Keywords: Social esteem, status, power, patronage, gift exchange

JEL Classification: 012, O17, Z13