Game of Social Status

This thesis points out that economic agents preferences can be dependent on the future utility and that economic agents can achieve higher social status and prestige with the conspicuous demonstrative consumption. I label this behavior as the game of social status. Some companies even adjust their production to this phenomenon as they produce quiet and loud goods or as they lower their production. This thesis also suggests that the conspicuous demonstrative consumption and positional externalities may be affected by race, age or social interactions. It also shows that these phenomena are not rich countries exclusive but they also appear in poor countries of Asian and African continent. Positional externalities can be theoretically removed by the nonexistence of volatility in fashion trends, by the application Coase theorem or by law restrictions and taxation of the incomes or consumption