Unwritten Rules: Social Norms and Customs

Lester Hadsell ()
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Lester Hadsell: University at Albany, State University of New York, Economics

Chapter 15 in Social Economies, 2026, pp 229-248 from Springer

Abstract: Abstract Part III of Social Economics, on social influences, begins with norms and customs. Markets rely on the overriding influence of self-interest. Yet, pursuit of self-interest without regard for social norms and customs can be detrimental to markets, increasing uncertainty and mistrust and leading to loss of economic value. Norms and customs, and culture more generally, influence attitudes regarding cooperation, honesty, trust, and fairness, the focus of this chapter. Public goods, common resources, the ultimatum game, game shows, and optimal levels of trust are used to illustrate. Evolutionary and biological foundations form a basis for some cultural behaviors. Neuroeconomics, combining neuroscience and economics to study brain mechanisms underlying decision-making in economic interactions, is an emerging field in this area. Neuroeconomists are finding, for example, that oxytocin is associated with a host of pro-social behaviors such as increased reciprocity and ingroup trust, concern for fairness, and the enforcement of cooperative norms through peer punishment. The evidence presented in this chapter shows that rational individuals sometimes forgo short-term gains and incur losses in exchange for mutual benefits in interactions with others. Rather than being hindered by such behavior, economies benefit from norms and customs. Without them, markets would likely slow considerably.

Keywords: Culture; Norms; Customs; Self-interest; Cooperation; Trust; Honesty; Fairness; Neuroeconomics; Ultimatum game; Evolutionary biology (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/978-3-032-21916-9_15

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