Status, Intertemporal Choice and Risk-Taking

@inproceedings{Robson2010StatusIC,
  title={Status, Intertemporal Choice and Risk-Taking},
  author={Arthur J. Robson},
  year={2010}
}
This paper studies endogenous risk-taking by embedding a concern for status (relative consumption) into an otherwise conventional model of economic growth. We prove that if the intertemporal production function is strictly concave, an equilibrium must converge to a unique steady state in which there is recurrent endogenous risk-taking. (The role played by concavity is clarified by considering a special case in which the production function is instead convex, in which there is no persistent risk… CONTINUE READING

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