Fabio asked: > > Question: How would economic theory change if we assumed that people > would are trying to maximize their relative rank in a group, or > had a taste for decreasing other's utility? Some, probably - but as it was noted by John Hull, economics can treat envy and relative wealth / position just as any other good.
I believe the greatest change should be to the way we (or some) view politics - or rather: democracy, which seems to me at the beginning to have been based on the more or less explicit belief that even if people are very self interested, the greatest positive sum game should be able to win the greatest public support. Public choice has extensively critizised the belief that democracy CAN do this - now we start to realise that people might not even want it: if it is 'too good' for others, and not 'good enough' for ourselves. How well this 'philosophy of envy' is rooted in people seems to me to be very dependent on culture. In the US people seem to care more about absolute gains than Europeans (especially Scandinavians, who seem to focus solely on relative gains). Some of this may be based on misunderstod economics (some people acyually think the world is a zero- sum game) - but the rest is just plane envy.. - jacob braestrup
