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Social Norms, Higher-Order Beliefs and the Emperor's New Clothes

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  • Zaki Wahhaj

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Abstract

The use of social sanctions against behaviour which contradicts a set of informal rules is often an important element in the functioning of informal institutions in traditional societies. In the social sciences, sanctioning behaviour has often been explained in terms of the internalisation of norms that prescribe the sanctions (e.g. Parsons 1951) or the threat of new sanctions against those who do not follow sanctioning behaviour (e.g. Akerlof 1976). We propose an alternative mechanism for maintaining a credible threat of social sanctions, showing that even in a population where individuals have not internalised a set of social norms, do not believe that others have internalised them, do not believe that others believe that others have internalised these norms, etc., up to a finite nth order, collective participation in social sanctions against behaviour which contradict the norms is an equilibrium if such beliefs exist at higher orders. The equilibrium can persist even if beliefs change over time, as long as the norms are believed to have been internalised at some finite nth order. The framework shows how precisely beliefs must change for the equilibrium to unravel and social norms to evolve.

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Bibliographic Info

Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number 1210.

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Date of creation: Jun 2012
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Handle: RePEc:ukc:ukcedp:1210

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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
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Keywords: social norms; higher-order belief; social sanctions; community enforcement; dynamics of norms; institutional change;

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  1. Farrell, Joseph & Maskin, Eric, 1987. "Renegotiation in Repeated Games," Department of Economics, Working Paper Series qt9wv3h5jb, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
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  7. Coate, Stephen & Ravallion, Martin, 1993. "Reciprocity without commitment : Characterization and performance of informal insurance arrangements," Journal of Development Economics, Elsevier, vol. 40(1), pages 1-24, February.
  8. Robert J. Aumann, 1999. "Interactive epistemology I: Knowledge," International Journal of Game Theory, Springer, vol. 28(3), pages 263-300.
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  10. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414.
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