Studies on Culture and Social Norms I

Culture can be defined as the shared values among a group. It consists of unwritten rules of social interactions. In a social group, people depend on these shared cultural values to interact with others. Hofstede et al. (2010) consider culture as “the software of mind”, the collective mental programming that distinguishes one group from another. They characterize seven different cultural dimensions that capture the values of different cultures: power distance, individualism, masculinity, uncertainty avoidance, long term orientation, indulgence versus restraint, and monumentalism. Social norms are an intrinsic part of culture (Elster, 1989, 2009; Bicchieri and Xiao, 2008). They are shaped by culture and serve an important channel through which culture operates. There are an increasing number of academic researchers coming to realize that culture and norms are important in explaining the behavior of individuals, the functioning of organizations, and the difference in economic growth rates across countries (Hofstede et al., 2010; Harrison and Huntington, 2001).

Social norms are a manifestation of cultural values and attitudes in a specific context. Even in the same culture, norms can vary across different group. Cultural values define what is good versus bad; social norms describe which actions are appropriate and which are not in a specific situation. Cultural values are the core of culture, and social norms are the applications of cultural values to different situations. If cultural values are the root of the tree, then social norms are the trunk and leaves. They both belong to the same tree of culture. Loosely speaking, culture is just a collection of social norms in a society. We do need to notice that norms are context dependent, and even in the same culture, different groups may have different norms (Akerlof and Kranton, 2000).

Economists have proposed theories on social norms, and they generally agree that norms are values and beliefs shared among people in a group. Ostrom (2000) defines social norms as shared understandings about actions that are obligatory, permitted, or forbidden. Elster (1989) maintains that social norms are just product of shared expectations and serve no particular purpose. He emphasizes that social norms prescribe actions, rather than outcomes. The functioning of social norms depends critically on the individuals being observed by others, and sanction mechanisms play an important role in the operation of social norms. Fehr and Fischbacher (2004) also emphasizes the role of informal social sanction in the enforcement of social norms. Young (1998) claims that social norms are coordinating device for social games, and define social norms as equilibria of coordination games. Applying stochastic process theory, he illustrates social norms welfare-improving are more likely to appear in the long run. Bicchieri (2005) points out that social norms transform social dilemma game to a coordination game by modifying people’s preferences. She emphasizes the importance of expectations in the working of social norms, and identified two distinct types of expectations. Empirical expectations refer to what one observed or know about the behavior of others in similar situations. Normative expectations are second-order expectations, referring to what we believe others think we ought to do in a situation.