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Laws and Norms

Author

Listed:
  • Roland Bénabou
  • Jean Tirole

Abstract

We analyze how private decisions and optimal public policies are shaped by personal and societal preferences, material incentives, and social norms. We show how incentives interact with honor and stigma, deriving optimal taxation. We then analyze the expressive role of law as embodying society’s values and when it calls for a weakening or a strengthening of incentives. The law should be softened when it signals agents’ willingness to contribute to the public good and toughened when it signals social externalities. We also shed light on norms-based interventions, societies’ resistance to economists’ messages, and the avoidance of cruel and unusual punishments.

Suggested Citation

  • Roland Bénabou & Jean Tirole, 2026. "Laws and Norms," Journal of Political Economy, University of Chicago Press, vol. 134(2), pages 731-772.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/738343
    DOI: 10.1086/738343
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    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K1 - Law and Economics - - Basic Areas of Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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