Social Norms and Norm Dynamics

Transcription

1 Socal Norms and Norm Dynamcs H. P. Young Economcs Socology Workshop Prnceton Unversty Aprl 6, 2009

2 Norm: A standard, a type; what s expected or regarded as normal; customary behavor. Oxford Englsh Dctonary

3 Examples Table manners Queung Avengng an nsult Not ltterng Tppng Keepng to the left sde of the road (but to the rght n a starwell) Looks: body weght Professonal standards: medcal treatment

4 What holds norms n place?

5 I. Coordnaton motve examples: keepng to the rght, transactng busness wth dollar blls nstead of glass beads an equlbrum at the populaton level there s no need for thrd party punshment these are sometmes called conventons

6 II. Fear of thrd party punshment Socal ostracsm f you fal to avenge an nsult to your sster Rased eyebrows f you eat peas wth your fngers

7 III. Adherence to nternalzed values Ltterng s wrong Falng to tp s ungenerous Beng overweght s unattractve Volatng the norm trggers feelngs of shame, gult, or mpars one s self mage

8 Norm dynamcs There s a postve feedback loop from behavors n a reference group to expectatons among ndvduals n that group about the behavors that are approprate or desrable The payoff to an ndvdual from takng an acton s ncreasng n the prevalence of that acton among members of one s reference group

9 What trggers norm shfts?

10 1. Technologcal change A new medcal treatment s ntroduced that shfts standards of professonal practce The prce of food falls, leadng people to eat more and become heaver on average Agrculture becomes mechanzed, leadng to a change n the relatve factor productvtes of labor and land.

11 2. Socal spllover effects A technologcal change (e.g., the brth control pll) leads to changes n socal norms regardng age of marrage, number of chldren, and female labor force partcpaton

12 3. Idosyncratc devatons by ndvduals Ths process s dffcult to dentfy because the trggerng events tend to be small and solated, lke mutatons n bologcal evoluton (A documented example would be Rosa Parks refusng to st at the back of the bus she devated from a prevalng norm and the devaton helped trgger a norm shft.)

13 An llustratve model: contractual norms n agrculture A landowner (the prncpal) negotates a contract wth hs tenant (the agent). In practce, the only contracts used are: Rent: the tenant rents the land at a negotated prce per acre Share: the tenant receves a negotated proporton of the gross output

14 A Chcago model The landlord makes a take t or leave t share offer to the tenant. The tenant accepts f and only f the expected payoff exceeds hs reservaton wage (say at a local factory job) Predcton: the share depends on the productvty of the land, the ablty of the tenant, and the reservaton wage

15 Incorporatng norms The landlord realzes that the tenant expects a share that s consstent wth the shares of other tenants n the area. If the tenant s not offered a normal and customary share, he may accept but be resentful and dffcult to deal wth.

16 There are n farms Each farm s dentfed wth the vertex of a graph N X s the set of neghbors of s a fnte set of possble share contracts x X s the tenant's share, 1- x the landlord's share A state of the process s a choce of contract on each farm: x X n

17 w s = reservaton wage at locaton = sol productvty at locaton Adjacency ndcator ( x, x ) 1 f x x j j ( x, x ) 0 f x x j j Expected payoff to landlord from contract x : u ( x, x ) (1 x ) s ( x, x ) f xs w j j N = 0 f xs w

18 Conformty part of payoff functon

19 e( x) (1/2) ( x, x ) j j # neghbor-pars choosng same contract r( x) (1 x ) s total rent to landowners ( x) r( x) e( x) potental functon

20 Stochastc adjustment process One farm s chosen at random each perod Contract there s renegotated Probablty of choosng a gven contract s loglnear n ts expected payoff condtonal on neghbors choces u( x, x ) e Px [ x] f xs w e u ( y, x ) y X: ys w 0 otherwse

21 Let X { x X : xs w}, X X The long run probablty of beng n state x X s gven by the Gbbs dstrbuton ( x) e [ r( x) e( x)] [ r( y) e( y)] y X e

22 Emprcal estmaton Use event data on contract choce to estmate a logt model condtonal on neghbors contract choces, landlord s expected ncome under the contract, local wages, etc.,

23 Qualtatve Behavor Assume, and n are large. Most probable states nvolve regonal customs that mask local heterogenety n sol qualty Areas wth hgh average sol qualty tend to have offer shares for tenants (as a neoclasscal model would predct) Boundares between regonal customs can be qute sharp, and the change n custom across the boundary qute large

24 Summary Norms tend to exhbt long perods of stass punctuated by sudden shfts (punctuated equlbrum) Locally norms nduce excess unformty that masks ndvdual heterogenety (conformty warp) Norms may dffer markedly among regons and groups (local conformty/global dversty)

25 References H. P. Young, Socal Norms, The New Palgrave Dctonary of Economcs, 2 nd Edton, London: Macmllan, H. P. Young and Mary A. Burke, Competton and Custom n Economc Contracts: A Case Study of Illnos Agrculture, Amercan Economc Revew, 91 (2001), H. P. Young, Indvdual Strategy and Socal Structure: An Evolutonary Theory of Insttutons. Prnceton Unversty Press, 1998.