When Context Shapes Preferences: Norm Erosion and Context-Dependent Fairness Concerns in Public Goods Games

Public goods provision is vulnerable to free riding, making sustained cooperation a central challenge in economics. Fehr and Schmidt’s inequity-aversion model explains how fairness concerns can support cooperation, but it treats preferences as fixed. Motivated by Kimbrough and Vostroknutov’s norm-sensitivity framework, this paper develops a reduced-form dynamic framework in which observed norm violations erode normative commitment over time. As normative commitment declines, the model maps this change into Fehr–Schmidt-style fairness parameters: guilt weakens and envy rises. These parameters provide an interpretive representation of norm erosion, while behavior is generated through a tractable contribution-scaling rule. The framework is calibrated illustratively to the public goods experiment of Fischbacher and Gächter. The calibration is not causal evidence of preference change and does not directly identify inequity-aversion parameters. It shows that a context-dependent preference channel can reproduce the observed aggregate decline in cooperation and generate testable implications. When no free-rider exposure is present, cooperation does not decline within the model. The model also predicts a nonlinear relationship between population-level free-rider prevalence and cooperation. Finally, because the model imposes a lower bound on normative commitment, this institutional floor determines long-run cooperation. The findings should be interpreted as model-based hypotheses for future experimental and field research.