The Dynamics of Social Norms

Abstract

This book develops a general framework for studying the dynamics of social norms: how they arise, why they persist, and what causes them to change. Norms are ubiquitous in economic and social life. They affect the choice of career, levels of compensation, educational attainment, and the structure of economic contracts. They influence decisions about whether to get married or divorced, how many children to have, and when to retire. The book shows how these and other normative influences can be incorporated into economics without giving up the idea that people act purposively and for the most part rationally given their expectations about the actions of others. The framework is dynamic, showing how norms arise from out-of-equilibrium conditions, how transitions between equilibria occur, and what types of interventions are most effective in promoting norm change. The approach is illustrated through a wide range contemporary and historical examples, including norms of tipping, principal-agent contracts, dueling, modes of dress, circumcision, the consumption of luxury goods, women’s suffrage, capital punishment, and many others.