This paper examines the impact of income growth and income inequality on household saving rates and payoffs in a non-cooperative game where each player’s payoff depends on her present and future consumption and her rank in the present consumption distribution. The setting is a pooling...

This paper examines the impact of income growth and income inequality on household saving rates and payoffs in a non-cooperative game where each player's payoff depends on her present and future consumption and her rank in the present-consumption distribution. The setting is a pooling...

Poor families around the world spend a large fraction of their income consuming goods that do not appear to alleviate poverty, while saving at low rates. We suggest that individuals care about economic status and hence we interpret this behavior as conspicuous consumption that is intended to...