Economia Politica. Rivista di teoria e analisi Economia Politica. Rivista di teoria e analisi
Non-Technical Summary
The economics literature dealing with the importance of social norms and
their consequences on the economy (e.g. Akerlof 1980) generally assumes the
individual can choose only whether or not to obey any given social norm,
and that informal social sanctions, considered to be exogenous, influence
such decisions. The present paper seeks, through a simple model, to account
for the degree to which individuals’ decisions determine the eventual
punishment to be inflicted upon those who violate society’s norms. Thus,
social sanctions are to be considered endogenous and we may assess when and
if a sufficient level of social sanction can be attained which sustains the
norm as the equilibrium state.
Regarding decisions on obedience, the behavioral model adopts accepted
criteria: disobedience, though it may produce pecuniary benefits,
engenders losses in terms of reputation (social sanction) and an additional
subjective penalty if the person violating the norm is one who believe in
its correctness (a believer). Respecting the norm, on the other hand,
entails bearing the costs of following the norm, rather than one’s
preferences. Regarding the decision to punish disobedience, it is assumed
that believers on the one hand, desire widespread obedience (high “degree
of observance), and on the other, feel an ethical obligation to punish
transgressors. The hypothesis of a direct motivation for sanctioning, which
may be described as a feeling of a warm glow (Andreoni 1990), has been
introduced to attenuate problems of free-riding, which arise from being
the degree of observance a pure public good.
On the basis of the foregoing assumptions, a specific model has been
developed. Its main features are that (1) a given social norm regards a
particular bundle of goods (distinct from those that would be optimal in
its absence), (2) a social sanction represents a sort of ostracism, (3) the
individual is motivated by (a) material aspects (consumption), (b) interest
in social relations, and, if a believer, (c) the desire for a high degree
of societal observance and (d) an ethical obligation to punish
transgressors.
In order to achieve an analysis of macro-characteristics, individual
behaviors have been grouped by means of some simple hypotheses regarding
preference distributions. Such macro-analysis allows for examination of the
conditions, if any, which would determine an overall level of (endogenous)
social sanction guaranteeing high equilibrium observance of a social norm.
Lastly, the potential dynamic evolution of the model is considered. First,
it is shown that the macro-dynamics assumed by Akerlof (ibid.) is based on
sound social psychology foundations. Then it is shown that such hypotheses
imply stable persistence of equilibria with social norms, also in the
framework of the present model.
Andreoni J. (1990), Impure Altruism and Donations to Public Goods: A
Theory of Warm-Glow Giving, Economic Journal, vol. 100, pp. 464-477.
Akerlof G.A. (1980), A Theory of Social Custom, of Which Unemployment May
Be One Consequence, Quarterly Journal of Economics, vol. 94, pp. 749-775.
TOMMASO LUZZATI is post-doctoral student at the Università degli Studi di Ancona, Dipartimento di Economia, Via Birarelli 11, 60121 Ancona
tluzzati@ec.unipi.it
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