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A theory of norm compliance: Punishment and reputation

  • Teraji, Shinji

Why do not social norms simply collapse from the violation? This paper analyzes two distinct mechanisms on norm compliance: punishment and reputation. The model considers two groups of agents in a society with one norm. Agents in one group choose whether to comply with the norm, while agents in the other group potentially punish opponents who violate the norm. The paper investigates two scenarios to account for the long-run stability of the norm. In one scenario, the norm is enforced due to a higher level of punishment of the violation. In another scenario, everyone is motivated due to reputation formation, despite a lower level of punishment by others. The interaction of two mechanisms provides a convenient way to norm compliance.

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File URL: http://www.sciencedirect.com/science/article/pii/S1053535713000097
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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 44 (2013)
Issue (Month): C ()
Pages: 1-6

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Handle: RePEc:eee:soceco:v:44:y:2013:i:c:p:1-6
DOI: 10.1016/j.socec.2013.01.008
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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  1. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  2. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
  3. Dirk Engelmann & Urs Fischbacher, 2003. "Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game," CERGE-EI Working Papers wp215, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  4. James Andreoni & B. Douglas Bernheim, 2007. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Discussion Papers 07-030, Stanford Institute for Economic Policy Research.
  5. Dirk Sliwka, 2007. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," American Economic Review, American Economic Association, vol. 97(3), pages 999-1012, June.
  6. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
  7. Tirole, J., 1993. "A Theory of Collective Reputations with Applications to the Persistence of Corruption and to Firm Quality," Working papers 93-13, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
  9. Ernst Fehr & Urs Fischbacher, 2004. "Third-party punishment and social norms," Experimental 0409002, EconWPA.
  10. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
  11. Andreoni, James, 1995. "Cooperation in Public-Goods Experiments: Kindness or Confusion?," American Economic Review, American Economic Association, vol. 85(4), pages 891-904, September.
  12. Posner, Richard A, 1997. "Social Norms and the Law: An Economic Approach," American Economic Review, American Economic Association, vol. 87(2), pages 365-69, May.
  13. Robin Naylor, 1989. "Strikes, Free Riders, and Social Customs," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 771-785.
  14. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
  15. Teraji, Shinji, 2007. "Morale and the evolution of norms," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 48-57, February.
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