Experimental Economics
Lecture 9: Social Norms
Prof. Dr. Dorothea Kübler Taught by Dr. Hande Erkut Summer term 2018
What is a social norm?
Social norms are… “…shared understandings about ac0ons that are obligatory, permiLed, or forbidden”
(Ostrom, 2000, pp. 143–144)
Collec&vely perceived Their existence must be accepted by the members of the society. Non-‐outcome oriented Prescribe or proscribe acTons rather than outcomes: Help others, Don’t lie…
I. Which norms apply to a given situaTon?
II. Do measured social norms explain behavior in a given seXng?
III. How can we make good norms more salient?
I. Methods for idenTfying norms Indirect methods: 1. Observing pro-‐social behaviour that seems to be in line with the norms of reciprocity, fairness, cooperaTon, etc. Dictator game: fairness
2. Introducing punishment mechanisms Example: Public goods game
Social norm: CooperaTon
o Social norm is detected and sustained by the punishment mechanism.
Weimann et al. (2012) Fehr and Gächter (2000)
Direct Methods 1. Ask subjects their opinion on what the appropriate behavior is in a given situaTon. Non-‐incenTvized 2. EliciTng social norms by incenTvizing subjects.
Krupka and Weber (2013, JEEA) IdenTfying social norms using coordinaTon games: Why does dictator game sharing vary?
Two payoff-‐equivalent dictator games Standard Game: Dictator has $10 and decides how much to give to second player. Bully Game: Both players have $5 and dictator decides how much to take from or give to the second player.
Norm elicitaTon experiment Subjects are described one of the two payoff-‐idenTcal dictator games (standard or bully) and rank the social appropriateness of each possible acTon of the dictator. KW incenTvized subjects by offering them extra money in case they manage to match the modal choice.
KW’s conjecture: Taking will be perceived as less socially appropriate than giving; choices that involve taking will be less socially appropriate in bully game compared to standard game.
-‐1
-‐0.8
-‐0.6
-‐0.4
-‐0.2
0
0.2
0.4
0.6
0.8
1
(10,0) (9,1) (8,2) (7,3) (6,4) (5,5) (4,6) (3,7) (2,8) (1,9) (0,10)
Standard
Bully
Average appropriateness raTngs across games
Two PredicTons from Norm ElicitaTon Experiment: o AcTon that produces equal split ($5, $5) is more likely to
be selected in bully dictator than in the standard dictator game.
o Given equal split is not selected, the acTon that produces
($10, $0) split is more likely to be selected in bully dictator than in the standard dictator game.
I. Which norms apply to a given situaTon?
II. Do measured social norms explain behavior in a given seXng?
III. How can we make good norms more salient?
Dictator Game Experiment: A different group of subjects actually play either bully dictator game or standard dictator game.
• Out of the parTcipants who did not choose equal split: Standard game: 40% gave $0 Bully Game: 52% gave $0
II. Do norms explain behavior?
CondiTonal logit esTmaTon of choice determinants
π(ak ): monetary payoff produced by the selected acTon N(ak ): social appropriateness of an acTon
Measured social norms explain behavior in • Dictator games (Krupka and Weber 2013, Erkut et al. 2015)
• Gim exchange games (Gächter et al. 2013) • Bertrand game (Krupka et al. 2017)
I. Which norms apply to a given situaTon?
II. Do measured social norms explain behavior in a given seXng?
III. How can we make good norms more salient?
III. How can we make good norms more salient? i. Framing of the game
Ø People choose ‘cooperate’ more when the game is labeled as Community Game instead of a Wall Street Game. (Liberman et al. 2004)
Ø People choose ‘cooperate’ more when the game is explained as an interpersonal interacTon or internaTonal negoTaTon game, instead of a bargaining game. (Eiser and Bhavnani 1974)
ii. Inducing norms Cialdini et al. (1990, J Pers Soc Psychol) A Focus Theory of NormaTve Conduct: Recycling the Concept of Norms to Reduce LiLering in Public Places Influence the parTcipants’ beliefs about the acTons of others and their normaTve beliefs by • varying the cleanliness of environment • displaying a message saying "April is keep Arizona beauTful
month. Please do not liLer.”
Ø People liLer less to a clean environment as opposed to a liLered environment
Ø People liLer less when they are shown the message above
iii. Social image Since social norms are shared in common, their applicaTon is detected by society itself. Thus, they are mostly acTvated when others observe the acTon (Elster, 2007). Conjecture: Since we have social image concerns, we behave more in line with the social norms when others are present.
Andreoni and Petrie (2004, JPubE) Public goods experiments without confidenTality: a glimpse into fund-‐raising
Ø People contribute more when they can be idenTfied by the group members.
Filiz-‐Ozbay and Ozbay (2013, EE) Effect of an audience in public good provision.
Effort Money
Ø Being observed by an audience increases effort contribuTons, but not monetary contribuTons.
Andreoni and Bernheim (2009, Econometrica) Social image and the 50–50 norm: A theoreTcal and experimental analysis of audience effects • Dictator game: Dictator decides how to allocate $20. • With probability 1 − p, dictator chooses the transfer, and with
probability p, nature sets it equal to some fixed value, x0. • Dictators, recipients, and outcomes are publicly idenTfied.
UD=F((1-‐x),m)+t G(x-‐xF) x: The payoff dictator allocates to recipient m: Social image concern xF: Social norm (1/2 for dictator game) t: Fairness concern
TheoreTcal predicTon: As p increases -‐the mass of dictators who choose any given x0 (close to zero) increase -‐the mass of dictators who split the payoff equally decrease
Ariely et al. (2009, AER) Doing Good or Doing Well? Image MoTvaTon and Monetary IncenTves in Behaving Prosocially.
Do monetary incenTves crowd-‐out image moTvaTon in public? Experiment: Subjects earn money for a charity by doing a real-‐effort task. (Public vs. private; with vs. without monetary incenTves) Image-‐Mo0va0on Hypothesis: For a posiTve image, increasing visibility increases the level of prosocial acTvity. Effec0veness Hypothesis: Extrinsic rewards are less effecTve the greater is the visibility of the prosocial act.
For a good charity: • Effort is greater when observed by others • Effort is greater in private condiTon when there are monetary incenTves
• Effort is smaller in public condiTon when there are monetary incenTves