IDEAS home Printed from
   My bibliography  Save this paper

Incentives and Social Norms in Household Behavior


  • Lindbeck, Assar

    () (Institute for International Economic Studies, Stockholm University)


In a broad psychological perspective, both economic incentives and social norms may be be regarded as giving rise to purposesful, or “rational” behavior. By this I simply mean that individuals act in accordance with expected reward or punishment, even though the form these take differs substantially in the two cases. Whereas economic incentives imply “material rewards”, or favors that can be traded for such rewards including leisure, social norms imply “social rewards”. The latter basically take the form of approval or disapproval from others, and related feelings of pride or shame. Moreover, once a social norm has been internalized in an individual’s own value system, behavior in accordance with, or against, the norm will also result in feelings of self-respect or guilt. All this suggests that not only economic incentives but also social norms may be analyzed by means of utility theory, as will be illustrated below. Many social norms may not have much to do with economic incentives (Elster,1989). In some cases, it is, however, useful to study the interaction between them. Indeed, this is the basic message of the paper. My discussion will be limited to three norms of apparent importance for household behavior: (i) work norms; (ii) norms against wage underbidding; and (iii) saving and consumption norms. Thus, the paper deals with norms concerning willingness to work, ability to get a job and the use of income.

Suggested Citation

  • Lindbeck, Assar, 1997. "Incentives and Social Norms in Household Behavior," Seminar Papers 622, Stockholm University, Institute for International Economic Studies.
  • Handle: RePEc:hhs:iiessp:0622

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Pollak, Robert A, 1976. "Interdependent Preferences," American Economic Review, American Economic Association, vol. 66(3), pages 309-320, June.
    2. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-877, October.
    3. Alessie, Rob & Kapteyn, Arie, 1991. "Habit Formation, Interdependent References and Demographic Effects in the Almost Ideal Demand System," Economic Journal, Royal Economic Society, vol. 101(406), pages 404-419, May.
    4. Lindbeck, Assar, 1995. " Welfare State Disincentives with Endogenous Habits and Norms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 477-494, December.
    5. 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.
    6. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
    7. Kapteyn, Arie & Wansbeek, Tom, 1982. "Empirical evidence on preference formation," Journal of Economic Psychology, Elsevier, vol. 2(2), pages 137-154, June.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Social Norms; Incentives; Employment; Saving; Consumption;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:iiessp:0622. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hanna Christiansson). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.