Zvonimir Bašić
77 posts
@BasicZvonimir
Lecturer (Assistant Professor) in Economics at @UofGlasgow & @UofGasbs | Formerly @UniBonn & @eeg_mpi | Behavioral and Experimental Economist
Let me tell you why I think this might be the most important paper on social preferences of the decade (after Krupka and Weber, 2013). A major question in behavioral economics is: how can we explain people’s behavior through a utility function? This question is challenging, even for simple decisions like giving money to a charity. Classic social preference models based on equity and efficiency have proven to be limited, paving the way for the search for better utility functions. In the 2000s, behavioral economists began to recognize the importance of incorporating norms into utility functions. Krupka and Weber (2013) eventually proposed a model in which an individual’s utility depends on the “injunctive norm,” i.e., beliefs about what others believe to be the right thing to do. They used this model to explain various regularities in the dictator game, a simple decision problem similar to a charity donation. This was a significant step forward. However, researchers soon realized that in these contexts, personal norms (individual beliefs about what is right or wrong) may also be playing an important role, perhaps even stronger than injunctive norms. But there is a major challenge when you try to measure personal norms. If you simply ask people what they believe is the right thing to do after they’ve made a decision, you typically observe a strong correlation. However, this correlation might be driven by the fact that people prefer to present themselves as adhering to personal norms rather than as “puppets” following what others think is right. Basic and Verrina propose a clever solution to this measurement issue: they assess norms and behavior one month apart to reduce potential biases from this “contagion” effect. Interestingly, their findings show that in several one-shot, anonymous, and unilateral games, personal norms indeed predict behavior more strongly than injunctive norms. Instead, when the choice is public, the influence of injunctive norms increases, becoming comparable to that of personal norms. Additionally, the authors propose a new utility function that combines material self-interest, tendencies to follow personal norms, and tendencies to follow injunctive norms. I believe this paper makes two significant steps forward in understanding human behavior: it develops a new experimental paradigm to measure the influence of norms on behavior, and it introduces a new utility function. Admittedly, I have also a selfish reason for particularly appreciating this work: I have been an early advocate for the role of personal norms, introducing a utility function that formalized their role and predicting that personal norms would be the dominant factor in one-shot and anonymous interactions (see royalsocietypublishing.org/doi/full/10.10…). It is refreshing to see evidence supporting this broad effect. At the same time, Basic and Verrina also highlight the role of injunctive norms, something I did not predict. This article opens several questions that I think warrant future research. For example: What happens in multilateral games (where more than one person makes a decision)? The obvious hypothesis is that injunctive norms will play a larger role, as predicting others’ behavior becomes more critical. What is the role of descriptive norms? I lack a strong intuition here, although several studies suggest that descriptive norms might influence behavior even more than injunctive norms. Paper: sciencedirect.com/science/articl… Congratulations to Basic (@BasicZvonimir) and Verrina (@VerrinaEugenio) for this outstanding work.
