Social Norms and Moral Hazard

Martin Dufwenberg and Michael Lundholm ()

Working Papers from Uppsala - Working Paper Series

Abstract: The probability of income loss depends on talent and effort. Effort has positive externalities and therefore individuals are awarded status in proportion to their perceived diligence. The social norm requires more effort from individuals perceived as more talented. But talent is private information and individuals cuningly choose effort so as to manipulate the public perception of their talent. We analyze the workings of social insurance system in this setting.

Keywords: SOCIAL INSURANCE; MORAL HAZARD (search for similar items in EconPapers)
JEL-codes: A14 C72 D81 D82 G28 H55 I38 J65 (search for similar items in EconPapers)
Pages: 22 pages
Date: 1997
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Related works:
Journal Article: Social Norms and Moral Hazard (2001)
Working Paper: Social Norms and Moral Hazard (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:uppaal:1997-28

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