Archive forAssignment Question

Assignment Question on The Darwin Economy

In The Darwin Economy, Robert Frank argues that a (if not the) main reason that market equilibrium might diverge from maximum social welfare is that people take into account positional concerns when making many decisions. This results in optimal individual decisions that are not optimal social decisions. Individuals would benefit from policies that prevent them taking positional concerns into account (or raise the cost of doing so).

Can you provide examples of decisions for which positional concerns might play a significant role? Are there decisions where positional concerns are not likely to be of much importance?

Comments (29)