When in Rome: Presenting a method for identifying social norms

1. When in Rome:Presenting a method for identifying social norms Joint with Erin Krupka, IZA Roberto Weber, Carnegie Mellon

2. Social Norms In Economics • Social norms have gained attention in economics • Offer an explanation for important economic activities • Welfare participation (Lyndbeck et al. ’99) • Tipping and punctuality (Azar ‘06, Conlin et al. ’03, Basu & Weibull ‘03) • The existence of incomplete contracts (Fehr and Gachter ’00) • Can account for actions inconsistent with self-interest • Kahneman et al. ‘86, Fehr & Schmidt ’00, Krupka & Weber ‘07 • Separate stream of research in economics and psychology examines the role expectations play in shaping behavior • What others will do (Croson ’00; Dufwenberg et al. ’07) • What others should do (Krupka & Weber ’07, Bicchieri & Xiao ’07) • Here: Shared normative expectations identify social norms.

3. What is a social norm? A social norm is a shared agreement regarding the appropriateness or inappropriateness of a particular behavior. Elster (JEP, ’89), Fehr & Gachter (JEP, ’00), Bettenhausen & Murnighan (ASQ, ’91), Miller & Prentice (Social Psych. Handbook, ’96)

4. “…social norms by the feature that they are not outcome- oriented…[for] norms to be social, they must be shared by other people and partly sustained by their approval and disapproval.” Elster, 1989 • “Norms are commonly consideredlegitimate, socially shared guidelines to accepted and expected behavior…” Bettenhausen and Murnighan, 1991 • “A social norm is an attribute of a group that is considered to be both descriptive of and prescriptive for its members..” Miller and Prentice, 1996 • “Social norm is defined as “a behavioral regularity; that is […] based on a socially shared beliefabout how one oughtto behave..” Fehr and Gachter, 2000

5. Properties of social norms • Social constructs that involve shared agreement • Use coordination games to identify social norms (Schelling ’60; Mehta et al. ‘94, Sugden ‘95) Two players can divide a pile of 100 pennies in anyway they like. If they fail to agree on a division, they forfeit the money. They may not talk prior to suggesting the division. • 8 8 8 8 • In pure, one shot coordination games, players have common interest in coordinating, but no formal structure of game distinguish between equilibria. • Schelling suggested (Mehta et al. and Sugden show) the high coordination success can be attributed to focal points with cultural prominence.

6. Properties of social norms • Social constructs that involve shared agreement • Use coordination games to identify social norms (Schelling ’60; Mehta et al. ‘94, Sugden ‘95) • Regulate behaviors (as well as outcomes) • Norms may also operate independently of outcomes • From group to group, social norms can vary • Shared agreement concerning appropriate behaviors can be different when coordinating with different reference groups • Shared agreement and personal beliefs concerning appropriate behavior need not correspond • Eliciting personal beliefs (without the coordination game) need not capture social norms

7. Experimental Design • Explore five different games in which minor variations in the design of the game produce large variations in behavior: • Standard Dictator game (baseline) • Bully Dictator game • 4 additional games • Judging Experiment: Subjects given incentives to coordinate with each other in a judgment task. • Behavior Experiment: (other) Subjects play these games.

8. Experimental Design: Raters • Judging Experiment: Introduce an instrument to identify social norms • Standard or Bully dictator games is described first • Followed by 4 other dictator games • Behavior Experiment:Show that norms identified with the instrument correspond to actual behavior (of others) • Allow a different set of subjects to play the games so that we can compare behavior to ratings – still in pilot phase

9. Standard Dictator Game Situation: Individual A and B are randomly and anonymously paired. In each pair, Individual A will receive $10. A will then have the opportunity to give any amount of his or her $10 to B or to give no money to B. This choice will determine how much money each will receive. Example of the judging table

10. Definition of Socially Appropriate “By socially appropriate, we mean behavior that most people agree is the ‘correct’ or ‘ethical’ thing to do. Another way to think about what we mean is that if Individual A were to select a socially inappropriate choice, then someone else might be angry at Individual A for doing so.”

11. Standard Dictator Game Situation: Individual A and B are randomly and anonymously paired. In each pair, Individual A will receive $10. A will then have the opportunity to give any amount of his or her $10 to B or to give no money to B. This choice will determine how much money each will receive. Example of the judging table  

12. Bully Dictator Game Situation: Individual A and B are randomly and anonymously paired. In each pair, Individual A will receive $5 and individual B will receive $5. A will then have the opportunity to give any amount of his or her $5 to B or to take up to $5 from B. This choice will determine how much money each will receive. Example of the judging table

13. Judging Experiment Design • 115 total subjects participated in the rating task • Groups of 17-24 subjects • University of Pittsburgh / Carnegie Mellon • 64 Standard / 51 Bully • Procedures for the rating task • Show up fee: $7 • General instructions • Subjects first encountered Standard or Bully game • Then a series of several other games in varying order • Take and Sorting • “Hidden” dictator games • Game-by-game instructions read aloud • One game and action selected at random; payment ($5) for ratings that matched the modal response

14. Behavior Experiment Design(still in data collection stage) • 53 subjects participated in the playing the games • Subjects were taken at the end of several classes • Carnegie Mellon • 29 Standard / 24 Bully • Procedures behavior experiment • Show up fee: $2 • General instructions • Ss either played the Standard or the Bully game • They were handed two envelopes and asked to make their decision in private outside of the class room • After making their decision, they deposited the envelope labeled ‘Money for other person’ into a box and left.

15. Modifying the Dictator Game (Bully) • A Standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (Bully) dictator game (cf. Eichenberger & Oberholzer-Gee ‘98) • Dictator and recipient each endowed with $5 • Dictator may take up to $5 from or give up to $5 to the recipient Behavior: Average for recipient $1.59 more in Bully than in Standard

16. Modifying the Dictator Game (Bully) • A Standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (Bully) dictator game • Dictator and recipient each endowed with $5 • Dictator may take up to $5 from or give up to $5 to the recipient Behavior: Average for recipient $1.59 more in Bully than in Standard

17. Modifying the Dictator Game (Bully) • A standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (bully) dictator game • Dictator and recipient each endowed with $5 • Dictator may take up to $5 from or give up to $5 to the recipient Behavior: Average for recipient $1.57 more in bully than in standard

18. Relative to standard: Krupka and Weber observe that dictators give $1.57 more to recipient in Bully.

21. Modifying the Dictator Game (Sorting) • A standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (sorting) dictator game (Lazear et al., 2006; cf. Dana et al., 2006) • Dictator can choose not to play game • Passing produces $10,$0 allocation; recipient not informed of game Behavior: Average for recipient $1.29 less in Sorting than in Standard

22. Modifying the Dictator Game (Sorting) • A standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (sorting) dictator game (Lazear et al., 2006; cf. Dana et al., 2006) • Dictator can choose not to play game • Passing produces $10,$0 allocation; recipient not informed of game Behavior: Average for recipient $1.29 less in Sorting than in Standard

23. Modifying the Dictator Game (Take) • A Standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (Take) dictator game (List 2007, Bardsley 2006) • Dictator can give up to $10 or take up to $2 of participation fee Behavior: Average for recipient $1.63 less in Take than in Standard

24. Modifying the Dictator Game (Take) • A Standard dictator game: • Dictator endowed with $10 • May give up to $10 to a recipient • A modified (Take) dictator game (List 2007, Bardsley 2006) • Dictator can give up to $10 or take up to $2 Behavior: Average for recipient $1.63 less in Take than in Standard

25. Modifying the Dictator Game (Endogenous Uncertainty) • A Standardbinary dictator game: • A: $6, $1 • B: $5, $5 • A modified (endogenous uncertainty) Dictator game with unknown consequences • A: $6, ($1 or $5) • B: $5, ($5 or $1) • Uncertainty can be costlessly and easily resolved Behavior: 74% chose B ($5,$5) in Standard 37% chose B ($5, $5 or $1) and left payoffs hidden in EU treatment. $1 $5 $5 $1

28. Relative to standard: Krupka and Weber observe that dictators give $1.63 less to recipient in Take.

29. Relative to standard: Lazear et al. observe that dictators give $1.29 less to recipient in Sorting.

32. Summary • Introducing a method for identifying social norms which relies on shared normative agreement. • By measuring social agreement on appropriateness / inappropriateness of actions with matching games. • In our framework, a social norm is a profile of collective appropriateness ratings for all the actions available in a particular context. Each line in our graph was a social norm. • Our version is better than using a point-estimate of social norm • Allows us to distinguish between degrees of appropriateness in a way that is important to for influencing behavior (not captured by point-estimate) • Dinner tip 20%, Drink tip 10%, but departures matter too. • Point estimate may not vary in certain domains, but appropriateness of departure from point estimate may vary • Showing up on time to dinner with friends/funeral same but arriving 5 minutes late is not the same and therefore people show up late in one domain and not the other. • Our games the $5,$5 is the point estimate, but we get mileage out of how appropriate other actions are. • Our instrument is better than using observed behavior • Instrument is applicable to most games and (non-laboratory) decisions. • Distinguishes between descriptive (do) and injunctive (ought) norms

33. Back up slides start here

34. Puzzling Results? Dictator responses appear to be easily manipulated by seemingly irrelevant treatments. Standard vs. Bully: Average for recipient $1.59 more in Bully than in Standard Standard vs. Sorting: Average for recipient $1.29 less in Sorting than in Standard Standard vs. Take: Average for recipient $1.63 less in Take than in Standard 74% chose B ($5,$5) in Standard 37% chose B ($5, $5 or $1) and left payoffs hidden in EU treatment. We argue that social norms are changing between treatments.