On the Viability of Gift Exchange in a Market Environment
Year: 1999
Type: article
Abstract: Is gift-exchange inevitably to be crowded out by impersonal market exchange? The presence of a thick-market externality indicates that this is indeed likely to be the case. But reciprocity or gift-exchange induces social relations. The utility function is extended in order to take account of social relations in the form of symbolic utility or moral sentiments. As long as moral sentiments are valued high enough it is shown that both market and gift-exchange can coexist. The spontaneous order need not necessarily select the most e#cient market size however. Keywords: exchange, reciprocity, gifts, moral and extended preferences. JEL Classi cation: A13, D51, D62, E11, L17. # We are indebted to Jan Boone, Lans Bovenberg, Patrick Franois, Richard Nahuis, and Sjak Smulders for useful comments on an earlier version of the paper. + Department of Economics and CentER, Tilburg University, the Netherlands and Department of Economics, University of Groningen, the Netherlands. Email: T.v...
Institution: Tilburg University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2117485984