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Introducing Social Norms in Game Theory

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  • Raúl López-Pérez

Abstract

This paper explicitly introduces norms in games, assuming that they shape (some) players’ utility and beliefs. People feel badly when they deviate from a binding norm, and the less other players deviate, the more badly they feel. Further, people anger at transgressors and get pleasure from punishing them. I then study how social norms and emotions affect cooperation, coordination, and punishment in a variety of games. The model is consistent with abundant experimental evidence that alternative models of social preferences cannot explain.

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Bibliographic Info

Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 292.

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Date of creation: Jun 2006
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Handle: RePEc:zur:iewwpx:292

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Keywords: Cooperation; Emotions; Focal Points; Punishment; Reciprocity; Social Norms;

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  1. Fehr, Ernst & Schmidt, Klaus M., 1998. "A Theory of Fairness, Competition and Cooperation," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1812, C.E.P.R. Discussion Papers.
  2. Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  3. Ernst Fehr & Klaus Schmidt, 2000. "Theories of Fairness and Reciprocity – Evidence and Economic Applications," CESifo Working Paper Series 403, CESifo Group Munich.
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