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What sustains social norms and how they evolve?: The case of tipping

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  • Azar, Ofer H.

Abstract

The paper presents a model of the evolution of social norms. When a norm is costly to follow and people do not derive benefits from following it except for avoiding social disapproval, the norm erodes over time. Tip percentages, however, increased over the years, suggesting that people derive benefits from tipping, such as impressing others and improving their self-image as being generous and kind. The implications to the norm of not cooperating with new workers who accept lower wages are discussed; the model suggests that incumbent workers have reasons to follow this norm in addition to avoiding social disapproval.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 54 (2004)
Issue (Month): 1 (May)
Pages: 49-64

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Handle: RePEc:eee:jeborg:v:54:y:2004:i:1:p:49-64

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  1. Ofer H. Azar, 2003. "The Social Norm of Tipping: A Review," Others 0309006, EconWPA.
  2. Ernst Fehr & Armin Falk, . "Psychological Foundations of Incentives," IEW - Working Papers 095, Institute for Empirical Research in Economics - University of Zurich.
  3. Ofer H. Azar, 2003. "The implications of tipping for economics and management," Others 0309002, EconWPA.
  4. Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 749-75, June.
  5. Herbert Gintis, 2001. "The Puzzle of Prosociality," Working Papers 01-10-059, Santa Fe Institute.
  6. Lynn, Michael & Grassman, Andrea, 1990. "Restaurant tipping: an examination of three 'rational' explanations," Journal of Economic Psychology, Elsevier, vol. 11(2), pages 169-181, June.
  7. Herbert Gintis, 2001. "The Hitchhiker's Guide to Altruism: Gene-Culture Coevolution, and the Internalization of Norms," Working Papers 01-10-058, Santa Fe Institute.
  8. Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-88, September.
  9. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
  10. Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers 040, Institute for Empirical Research in Economics - University of Zurich.
  11. Sethi, Rajiv, 1996. "Evolutionary stability and social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 29(1), pages 113-140, January.
  12. Theodore C. Bergstrom, 2002. "Evolution of Social Behavior: Individual and Group Selection," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 67-88, Spring.
  13. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
  14. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
  15. Assar Lindbeck & Dennis J. Snower, 2001. "Insiders versus Outsiders," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 165-188, Winter.
  16. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
  17. Lynn, Michael & McCall, Michael, 2000. "Gratitude and gratuity: a meta-analysis of research on the service-tipping relationship," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 29(2), pages 203-214.
  18. Rajiv Sethi & E.Somanathan, 2002. "Understanding reciprocity," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 02-05, Indian Statistical Institute, New Delhi, India.
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