lukestein’s avatarlukestein’s Twitter Archive—№ 640

  1. A great presentation by @4misceldah at @WPCareySchool Finance this week. Theory: Agents infer neighbors’ signals about disaster risk from their consumption choices, but Ferraris are more salient than Toyotas. ⇒ Overconsumption (≡undersaving). 1/5
    oh my god twitter doesn’t include alt text from images in their API
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    1. …in reply to @lukestein
      Neighbors’ overconsumption affects neightbors → positive feedback. (Cf. “keeping up with the Joneses,” but this is a different mechanism: information, not preferences.) 2/5
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      1. …in reply to @lukestein
        Extends model with inference on (exogenous) social network: - Network connectivity → overconsumption↑ - Network centrality → overconsumption↑ - Wealth dispersion → overconsumption↑ 🤔 Instagram 🤔 Keeping Up With the Kardashians 🤔 Piketty 3/5
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        1. …in reply to @lukestein
          Extends model with OLG. From my elderly neighbor’s Ferrari, I infer (1) She saved a lot (disaster risk high) (2) She didn’t suffer a disaster (disaster risk low) In model, (2) always dominates. 4/5
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          1. …in reply to @lukestein
            Thanks again to David @4misceldah for a great talk on “visibility bias in the transmission of consumption norms and undersaving” (a significantly updated version of ssrn.com/abstract_id=2798638 )! 5/5
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