Social norms and economic incentives in firms

Steffen Huck, Dorothea Kübler and Jörgen Weibull

Journal of Economic Behavior & Organization, 2012, vol. 83, issue 2, 173-185

Abstract: This paper studies the interplay between economic incentives and social norms in firms. We introduce a general framework to model social norms arguing that norms stem from agents’ desire for, or peer pressure towards, social efficiency. In a simple model of team production we examine the interplay of three types of contracts with social norms. We show that one and the same norm can be output-increasing, neutral, or output-decreasing depending on the contract. Multiplicity of equilibria and crowding out effects of steeper incentives can arise.

Keywords: Social norms; Crowding out; Contracts (search for similar items in EconPapers)
JEL-codes: D23 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (64)

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Related works:
Working Paper: Social norms and economic incentives in firms (2012)
Working Paper: Social Norms and Economic Incentives in Firms (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:83:y:2012:i:2:p:173-185

DOI: 10.1016/j.jebo.2012.05.005

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