Volume 4, Issue 3 - Symposium on Social Norms

The papers presented in this volume are based on the conference "Social Norms, Self-Interest and Legal Compliance" which took place in Bar-Ilan University and Hebrew University in May 2007. The conference focused on several key themes in the social norms literature, including critical approaches to the role of self-interest in social norms and cooperation models; comparative discussions of the various methodologies used in this literature (e.g. ethnographies, game-based experiments, experimental surveys); the nature of the effect of legal regulation on social norms; behavioral accounts of legal instruments that may enhance social cooperation; and explorations of the potential contributions of the social and cognitive psychology sciences to economic models of social norms. In this volume, we present six of the conference papers. All submitted papers were subject to anonymous peer review.

In a variety of important domains, there is considerable correlational evidence suggestive of what are variously referred to as social norm effects, contagion effects, information cascades, or peer effects. It is difficult to statistically identify whether such effects are causal, and there are various non-causal mechanisms that can produce such apparent norm effects. Lab experiments demonstrate that real peer effects occur, but also that apparent cascade or peer effects can be spurious. A curious feature of American local school configuration policy provides an opportunity to identify true peer influences among adolescents. Some school districts send 6th graders to middle school (e.g., 6th-8th grade “junior high”); others retain 6th graders for one additional year in K-6 elementary schools. Using administrative data on public school students in North Carolina, we have found that sixth grade students attending middle schools are much more likely to be cited for discipline problems than those attending elementary school, and the effects appear to persist at least through ninth grade. A plausible explanation is that these effects occur because sixth graders in middle schools are suddenly exposed to two cohorts of older, more delinquent peers.

This paper explores the relations between law and social norms and in particular, the case of legal compliance in groups. Specifically, this paper argues that the rule of law is a social norm interfacing the formal institutions of society with the informal ones. As social institutions, norms should also be analyzed at the societal level – a level of analysis that neo-classical economic accounts have failed to address due to fundamental premises of current economic theory. Theories developed in psychology provide a good working framework for social norm analysis in general and of legal compliance (rule of law) in particular. Extant evidence is consistent with the present argument.

The main argument of this paper is that overconfidence is underrated and can have constructive value in situations in which people tend to display a hyperbolic discounting of future utility. By artificially raising the estimation of future rewards, overconfidence can offset the inhibitory effects of exaggerated preference for present rewards, thus producing greater incentive, greater perseverance, resolute performance, and consequently higher achievements. Examples of this effect are situations of negotiation, improved recovery rates from serious disease, and situations of violent confrontation or war. Because overconfidence can lead to positive outcomes, there is at times an incentive to manipulate the facts perceived by the decision maker in order to build up confidence and increase the efficiency of the decision. These manipulations are a branch of the general theory of non-cooperative games with non-perfect information. We particularly draw attention to internal manipulations, such as selective memory, deliberate forgetfulness, and calculated inadvertence. In light of the constructive value of overconfidence, we regard these common mental practices as possibly rational and beneficial. It follows that under some circumstances, and in particular where the assumption of calculated risk should be encouraged and the chilling effect of over-deterrence should be eschewed, a systematically erroneous assessment of risk is a key to optimal behavior. Therefore, we criticize the common supposition that an overconfident person should be deemed negligent even if his overconfidence proves useful. We further object to the common view that an intended manipulation of memory necessarily entails recklessness. For similar reasons, we argue that the law of complicity should acknowledge friendship and love as countervailing the need to combat crime, inasmuch as friendship and love are instrumental to self-esteem.

In this paper we consider the role of lawmakers as norm entrepreneurs. Drawing from expressive law theories and social response theories, we shed light on the role of law in shaping social values and norms, and on the ability of the law to produce social norms where they did not exist before. Furthermore, we unveil a possible undesirable effect of legal intervention, where a legal innovation can cause social divide and possible conflicts.

I argue for the usefulness of a value-based approach to legal regulation. The value-based approach designs institutions in ways that promote the development of values such as legitimacy. Such a development of values encourages people to follow the rules because they believe they ought to, rather than out of fear of punishment. I suggest that the deterrence approach has limits and that the values-based model is a more efficient and effective basis for encouraging people to bring their behavior into line with law and legal institutions.

This study combines the psychology of bias and the economics of equilibrium. We focus on two of the most discussed perceptual biases found by psychologists who studied the role social norms in ethical decision making. First, psychologists found a general tendency of people to over-estimate how many other people engage in unethical behavior. We show that this bias causes more people to violate the norm than if the bias were corrected. Second, psychologists found a general tendency of a person to over-estimate how many other people act the same as he does. We show that this bias does not change the number of people who violate the norm, contrary to the predictions of some psychologists. When a person suffers from both biases, they can augment or undermine each other. In either case, we show that supplying accurate information will cause more people to conform to the norm. In general, we show that applying the equilibrium concept to psychological studies improves public policy recommendations by increasing precision in predicting aggregate behavior over time.