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This Is How We Do It: How Social Norms and Social Identity Shape Decision Making under Uncertainty

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  • Francesca Lipari

    () (Department of Law and Economics, LUMSA University, 00193 Rome, Italy)

Abstract

The current study aims to investigate how the presence of social norms defines belief formation on future changes in social identity (i.e., diachronic identity), and how those beliefs affect individual decisions under uncertainty. The paper proposes a theoretical model in which individuals have preferences over their own attributes and over specific information structures. The individual preferences are motivated by the presence of social norms. The norms, while establishing the socially acceptable attributes of an individual identity, also drive individuals’ preferences for information acquisition or avoidance. The model incorporates social norms as empirical expectations and provides a prior dependent theory that allows for prior-dependent information attitudes. Firstly, the model implies that decisions are mitigated by socially grounded behavioral and cognitive biases; and secondly, that it can create an incentive to avoid information, even when the latter is useful, free, and independent of strategic considerations. These biases bring out individual trade-offs between the accuracy of decision making and self-image motivated by social conformity. The two behavioral motivations are represented through a game of an intra-personal model of choice under uncertainty in which self-deception and memory manipulation mechanisms are used to overcome the individuals’ internal trade-off.

Suggested Citation

  • Francesca Lipari, 2018. "This Is How We Do It: How Social Norms and Social Identity Shape Decision Making under Uncertainty," Games, MDPI, Open Access Journal, vol. 9(4), pages 1-31, December.
  • Handle: RePEc:gam:jgames:v:9:y:2018:i:4:p:99-:d:189152
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    References listed on IDEAS

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    More about this item

    Keywords

    identity; social norms; gender norms; decision-making under uncertainty;

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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