On the Viability of Gift Exchange in a Market Environment

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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 efficient market size however.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages28
Volume1999-113
Publication statusPublished - 1999

Publication series

NameCentER Discussion Paper
Volume1999-113

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Viability
Market environment
Gift exchange
Social relations
Moral sentiments
Efficient markets
Utility function
Externalities
Market size
Spontaneous order

Keywords

  • exchange
  • reciprocity
  • gifts
  • moral and extended preferences

Cite this

van de Klundert, T. C. M. J., & van de Ven, J. (1999). On the Viability of Gift Exchange in a Market Environment. (CentER Discussion Paper; Vol. 1999-113). Tilburg: Macroeconomics.
van de Klundert, T.C.M.J. ; van de Ven, J. / On the Viability of Gift Exchange in a Market Environment. Tilburg : Macroeconomics, 1999. (CentER Discussion Paper).
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van de Klundert, TCMJ & van de Ven, J 1999 'On the Viability of Gift Exchange in a Market Environment' CentER Discussion Paper, vol. 1999-113, Macroeconomics, Tilburg.

On the Viability of Gift Exchange in a Market Environment. / van de Klundert, T.C.M.J.; van de Ven, J.

Tilburg : Macroeconomics, 1999. (CentER Discussion Paper; Vol. 1999-113).

Research output: Working paperDiscussion paperOther research output

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T1 - On the Viability of Gift Exchange in a Market Environment

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AB - 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 efficient market size however.

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KW - reciprocity

KW - gifts

KW - moral and extended preferences

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BT - On the Viability of Gift Exchange in a Market Environment

PB - Macroeconomics

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ER -

van de Klundert TCMJ, van de Ven J. On the Viability of Gift Exchange in a Market Environment. Tilburg: Macroeconomics. 1999. (CentER Discussion Paper).