Norms and Conformity III

Social influences play an important role in social interactions. Social psychologists suggest that social influence can be informational or normative. Informational social influence occurs when the need to know what is right. They use others as a source of information. Informational social influence usually results in private acceptance wherein people truly believe in what other people are saying or doing.

Informational social influence has been used by economists to explain herd behavior and information cascade, showing how individual rational action can lead to group irrationality (Banerjee, 1992; Bikhchandani et al., 1992). Normative social influence, on the other hand, occurs because people have the need to be accepted by others. Normative social influence usually leads to public compliance, but not necessarily private acceptance. Normative social influence plays an important role in the functioning of social norms.

Social psychologists suggest that people are prone to social influence even when no other people are present. According to the self-awareness theory, people engage in the introspection process and evaluate and compare their behavior to their internal standards and values (Carver, 2003; Duval and Silvia, 2002). We want to consider ourselves as good, decent, wise, and intelligent individuals, and we want to be like by others. In order to feel good about ourselves, we tend to avoid taking actions that are socially inappropriate and abide by our personal norms. When we internalize social norms as our inner beliefs, we will also actively do what is prescribed by social norms.

Norms and Conformity II

Elster (1989) distinguishes social norms from moral norms, claiming that the former is motivated by the emotion of shame while the latter by the emotion of guilt. Also, as social norms are context dependent, moral norms are typically consequentialist and independent of context. This categorization is not helpful for analysis, as there is a great overlap between moral norms and social norms. It is better to simply distinguish social norms from personal norms, where conformity to social norms is motivated by acceptance of others and conformity to personal norms main aims to be liked by oneself. In this categorization, moral norms can fall into either social norms or personal norms, depending on contexts.

Social norms are different from personal norms. While both personal norms and social norms indicate what sort of behavior is appropriate or inappropriate, prescribed or proscribed, they satisfy different psychological needs. According to the self-determination theory, people have three basic psychological needs: autonomy, competence, and connectedness (Deci and Ryan 2000). Conforming to social norms fulfills the need to feel connected to others, to be liked by others. Abiding to personal norms satisfies the need to feel competent, to be right and to be liked by self. Personal norms are shaped by social norms to some extent, but they do not need to be identical. People may or may not internalize social norms as their personal beliefs. An individual may demonstrate a certain behavior prescribed by social norms, but the overt behavior may be incongruent with her personal beliefs. Under certain circumstances, behavior prescribed by social norms may not be conducive to the survival of individuals, so evolution endows human beings the ability to embrace personal beliefs that to some degree differ from social norms.

The Ik people are a good example to illustrate the possible discrepancy between social norms and personal norms. The Ik people often try to avoid situations where they have to follow a social norm. As documented by Turnbull (1987), it is clear that these hunter-gatherers had the norm of reciprocity, but they tried hard to avoid being a help-receiver. They would repair their leaking roof at night in order to escape offers to help and future responsibilities to repay the favor. They also hunted in a furtive way in order not to share the bounty with people encountered along the way. In the case of the Ik people, nobody is violating the norm, but everybody is trying to avoid situations where they would have to follow it.

Norms and Conformity I

Human beings are social animals (Aronson, 2003). We constantly interact with others on a daily basis. Social norms establish the boundaries or parameters of acceptable behavior in a group, and they are indispensable for the functioning of a group. Early research in social psychology suggests that in the absence of a social norm, people have the tendency to create one. Sherif (1937) conducted an experiment showing that after repeated public pronouncements, people establish a group norm using information provided by other people’s judgment.

Bicchieri (2005) argues that social norms and conventions are mechanisms to coordinate people’s actions in a group. She maintains that there is a subtle difference between social norms and conventions. Although both social norms and conventions are coordinating device, conventions (which are stable descriptive norms according to Bicchieri) are used to solve a coordination game, while social norms transform social dilemmas into coordination games. In other words, it is consistent with an individual’s interest to follow a convention, while following a social norm may be contradicting with a person’s immediate interest. Traffic rules are a good example of conventions. As long as you know that other people drive on the right according to the convention, you will also want to drive on the right because it fits your personal interest. But being generous and acting fairly toward others, which is prescribed by the social norms, does not square with your personal interest as it incurs material cost or the renunciation of benefit.

Bicchieri’s categorization in my view is not a good one, as it does not really correspond to the essence of social norms. Social norms have a social component in them: you conform to social norms because you want to be liked by others and have a good standing in the group. Whenever an individual thinks about whether her behavior is acceptable by others, she is probably thinking of a social norm. Foot-binding of women in ancient China, as Bicchieri argued, is a convention. No matter how this practice came into existence, it quickly spread to all but the lowest classes, and was accepted as a sign of gentility and an important condition for marriage (Mackie, 1996). It is obvious, however, a woman decides to go through the pains to bind her feet is mainly concerned about the acceptance of others, and for this reason, it is better to treat it as a social norm. Conformity to social norms has a signaling function: it sends signals to others who you are.

Studies on Culture and Social Norms VI

Economists believe that sanctioning is an inherent part of social norms. Fehr and Fischbacher (2004) use third-party punishment to study the functioning and content of social norms. A third party who can take costly action to punish selfish behavior is introduced into the dictator game and the prisoners’ dilemma game. About two thirds of the third parties punished selfish offers of the dictators in a third-party dictator game, and about 60% punished defectors in the prisoners’ dilemma game. Their experiment indicates that third-party sanctions are important for the functioning of social norms. Indeed, it may well be that this third-party punishment itself is prescribed by a social norm.

Social norms can be used to explain some interesting experimental results. Xiao and Houser (2009) found that rejection of unfair offers is significantly less frequent in an ultimatum game when receivers can express their feelings to the proposer. The authors conclude that costly punishment may be just a way to express negative emotions. Using the social norms theory, we can speculate the social norm prescribe to show antipathy when the proposer acts unfairly. When it is possible to use negative emotions to demonstrate an aversion to the unfair behavior, the receiver does not feel necessary to engage in costly punishment. The possibility for the receivers to express negative feelings also makes the proposers more likely to give fair offer, possibly because it exerts focusing influence and draws the attention of the proposers to the social norm.

Xiao and Houser (2005) studied the effect of emotional expression in a one-shot dictator game. Their results confirm that avoiding written expression of disapproval, or negative emotion, plays an important role in promoting fair decision making. Proposers act more generously when the receivers can respond with written messages, although monetary sanctions are more effective when we compare the results from the dictator game and the ultimatum game. These results imply that others' pinion may serve the same function as sanctions in the operation of social norms.

Studies on Culture and Social Norms V

Some experiments have shown that people’s preferences on conformity to social norms may depend on context. Psychologists maintain that norms only influence behavior when one’s attention is drawn to them (focusing influence) and a norm has greater impact on one’s behavior when one observes others behaving in alignment with that norm (informational influence). Krupka and Weber (2009) use a simple one-shot binary dictator game to test this theory. In the experiment, the dictator can choose either X, which leads to a fair allocation ($5, $5), or Y, which gives rise to an unfair allocation ($7, $1). In descriptive focusing treatment, before assigning roles and making decisions, each subject was asked to guess the percentages of subjects who chose X and Y in a previous session. In Bicchieri (2005)’s terms, the subjects were focused on empirical expectations. In the informational focusing treatment, the subjects were asked to guess what percentages of subjects in a previous session had stated X and Y should be chosen, and hence focused on normative expectations. In informational treatment, each subject observed the choices made by four previous participants. Compared to the baseline treatment, subjects exhibited significantly more prosocial behavior in the focusing treatments. The informational treatment shows that individuals are more likely to engage in prosocial behavior when they observe others doing so, which is consistent with the results from Bicchieri and Xiao (2008). This experiment shows that contextual cues that remind the individual the existence of social norms greatly increase pro-social behavior. Hence norm compliance exhibits a focusing effect, and norms only impact behavior when an individual’s attention is drawn to them.

Cason and Mui (1998) also demonstrate the functioning of social influence similar to Krupka and Weber (2009)’s informational treatment in the setting of a sequential dictator game. In their experimental design, 4 subjects, denoted as subject 1 to 4, form a group. In stage 1, all subjects first indicate the amount of money P1 they want to take from the $40 pie in a dictator game with market setting. The information on the decision is then exchanged between subject 1 and 3, and between subject 2 and 4 in the Relevant Information treatment, while the information about the subject’s date of birth is exchanged in the Irrelevant Information
treatment between odd-numbered subjects and between even-numbered subjects. In stage 2, all subjects indicate the amount of money P1 they want to take from the $40 pie. The role of proposer and the receiver is then assigned randomly, either odd-numbered players or even-number players would be the sellers, and each seller can be the seller of only one stage, which are also randomly determined. Their results show that receiving relevant information makes subjects less likely to move to more self-regarding choices. They also find that subjects who exhibit more self-regarding behavior on their first decisions are less likely to change choices in the second stage, implying the sensitivity to social norms is heterogeneous among subjects.

Studies on Culture and Social Norms IV

Rabin (1993) notices reciprocity is a common phenomenon in human interactions. In order to model reciprocity, he uses psychological game theory, incorporate beliefs and intentions into people’s preferences. In this model, people’s intentions are reflected by the action they take. But for situations like the dictator games where there is only one decision maker, the model is inadequate as we don’t have a measure on the other person’s intentions. A more generalized model proposed by Charness and Rabin (2002), even though incorporates social welfare concern, inequality aversion and reciprocity, is still not capable of explaining the above experimental results, because none of these components can explain the fact that people exploit moral wiggle room to behave selfishly.

The inadequacy of current theories on other-regarding preferences implies the importance to incorporate social norms into individuals’ preferences. Bicchieri (2005) is among the first that propose a norm-based utility function. The utility function she proposed has two parts: the monetary payoff and the norm-related utility. A social norm in her model is defined as one prescribed action in a situation, and disutility results when the agent violates the norm. The disutility is related to the reduction in others’ payoffs caused by this violation.

While this model provides better explanation for the above experiments compared to other models with prosocial preferences, it does not consider the case where multiple actions are equally appropriate, and its definition of norms makes it incapable in explaining results from experiments such as the multi-player dictator game studied by Dana et al. (2007).

Krupka and Weber (2013) propose a more refined definition of norms. Instead of defining a single appropriate action prescribed by the norm in a situation, they consider each action has some level of social appropriateness. They design a coordination game to elicit and quantify social norms. In their norm elicitation game, the subjects are asked to rate "social appropriateness” of an action in a specific situation on a scale of 4. The subjects get rewarded if their ratings are the same as the modal rating of the group. Using the elicited norms, Krupka and Weber analyzed the experimental results of various games, including famous games studies by other authors (List, 2007; Dana et al., 2006, 2007; Lazer and Pentland, 2009). Their experimental results show that social norms can provide a good prediction of individual decision making, and
subjects have a stable willingness to sacrifice money and take socially appropriate actions. Their research contributes to the endeavor to develop a theoretical model of social norms.

Studies on Culture and Social Norms III

Croson and Buchan (1999) use a trust game to investigate how gender interacts with cultures to influence individual behavior. The results are similar across cultures: no significant effect of gender is found on the amount send by the proposers, but women reciprocate significantly more than men. Beside cross-cultural studies, many other experimental studies emerging in recent years have shed light on how social norms function. Bicchieri and Xiao (2008) designed an experiment to test Bicchieri (2005)’s theory and test the relative importance of normative expectations and empirical expectations. In their dictator game, they tried to manipulate the subjects’ empirical expectations and normative expectations by showing them dictators’ decision or/and expectations in previous sessions. The expectation elicitation was made incentive compatible by rewarding the dictators based on the accuracy of the expectations they reported. The results show that subjects’ choice are influenced by both normative and empirical expectations, and when there is a conflict between the two expectations, empirical expectations are more important in predicting individual behavior.

Dana et al. (2006) show that people take into account other’s expectations while making decisions. They added one twist to the standard dictator game: the dictators can pay \$1 to exit the game with the advantage that the receiver will never know that the game has been played. About one third of dictators decided to quietly exit the game. In another private game setting where the receiver never knows about the game or where the money received is from, almost not exit was chosen. This implies that some dictators choose to give not because they care for fairness or others’ well-being, but simply because they don’t want to violate others’ expectations.

In another experiment, Dana et al. (2007) used binary dictator game to lend evidence to a similar argument: people behave generously mainly because they dislike appearing unfair to others. In their baseline treatment, the dictator can either choose A, which results in a self-interested allocation (\$6, \$1), or choose B, which leads to a fair allocation B (\$5, \$5). For the other three treatments, the level of transparency is reduced using different designs. In the hidden information treatment, the dictator can again choose A to receive $6 or B to receive $5, but the payoffs for the receiver are uncertain ex ante: with probability 0.5 the payoffs are the same as the baseline treatment (\$1 and \$5 respectively), and with probability 0.5 the payoffs for the receiver flip (\$5 and \$1 respectively). The dictator can choose to reveal the real payoffs or not. Many subjects chose not to reveal the really payoffs and took the selfish action. In their multiple dictator treatment, two subjects play the role of dictator and only when both of them choose A the allocation is inequitable (\$6, \$6, \$1), otherwise it will be a fair allocation (\$5,\$5,\$5). In their final treatment, the plausible deniability treatment, a "cutoff” feature is added to the baseline game: the computer will randomly choose an allocation if the dictator does not choose an action by the end of the cutoff period. Hence the receiver in this game would never know whether the allocation is chosen by the dictator or by the computer. The proportion implementing fair allocation in the three treatments that relax transparency, as the experimental results show, drops significantly compared to the baseline treatment. It seems that when the subjects have the moral wiggle room, they are more likely to behave according to self interest. People are willing shun away from a social norm, even at a cost, in order to make “justified” self-interested decision.

The above experiments have clearly shown that social norms play an important role in individual decision making and the expectations of other people matter. Current theories on prosocial preferences, such as inequality aversion, are inadequate in explaining these results (Fehr and Schmidt, 1999; Bolton and Ockenfels, 2000). In the game studied by (Dana et al., 2006), it is clear that the allocation (\$9,\$1) is preferred to (\$9,\$0) according to the inequality aversion model, but many subjects chose (\$9,\$0) given that the receiver would not know the proposed ever made any decision on the allocation. Similarly, the binary dictator game with hidden information in (Dana et al., 2007), revealing the payoff information for the receiver will aid the proposed in making decisions and increase her expected utility according to the inequality aversion model, but subjects chose to be ignorant on the other party’s potential payoff. Inequality aversion is outcome-based preferences. For the same reason, social welfare concerns, which drive people to maximize the total welfare of all the players, are not enough to explain the above experimental regularities.