On social norms and beliefs: A model of manager environmental behavior

Jorge H. Garcia and Jiegen Wei

Resource and Energy Economics, 2021, vol. 65, issue C

Abstract: A prevailing view in the literature states that social sanctions can support, in equilibrium, high levels of obedience to a costly norm. The reason is that social disapproval and stigmatization faced by the disobedient are highest when disobedience is the exception rather than the rule in society. In contrast, the Bayesian model introduced here shows that, imperfect information causes the expected social sanction to be lowest precisely when obedience is more common. This, amongst other findings, draws a distinct line between social and moral norms, both of which may depend on others’ behavior but not on action observability. The implications of the use of non-Bayesian belief formation rules by society, namely a representativeness rule (overweighting the signals) and conservativism (overweighting the prior), for payoff functions and equilibria are explored.

Keywords: Social interactions; Social norms; Asymmetric information; Bayesian beliefs; Non-Bayesian beliefs (search for similar items in EconPapers)
JEL-codes: D82 K42 L51 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:65:y:2021:i:c:s0928765521000178

DOI: 10.1016/j.reseneeco.2021.101232

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