A survey on the nature, reasons for compliance and emergence of social norms

The aim of the paper is to offer a critical review of some of the most important contributions on the subject of social norms. The analysis will hinge upon a fundamental distinction between self-regarding and other-regarding reasons to action, which are supposed to represent two basic types of motivations making up the individual system of rational deliberation. Such a dichotomy will make it possible to divide the account of rules of behaviour in three categories, depending on the weight accorded to one rather than the other reason to action. The narrower concept is given by what will be called strictly-conceived convention, which coincides with Lewis's classical account of a convention. In this case, it is the self-regarding motive that actually provides an underpinning of such a regularity of behaviour, making it possible to build a system of convergent mutual expectations. The next category, that of broadly-conceived conventions are based on Sugden's earliest works on the subject; in this case, the self-regarding motive is still the crucial one, but conventions are not necessarily mutually beneficial, thus coming down to a standard Nash equilibrium, or evolutionary stable strategy, notion. Finally, with the final category of norms a decisive shift out of the self-interested justification is accomplished. In fact, these regularities are grounded on some forms of other-regarding behaviour, as Sudgen's model of normative expectations sets out clearly. The cognitive structure needed in order to generate such type of expectations leading to norms is then critically examined, reaching the conclusion that the account of norms provided in the received theory does not prove thoroughly satisfactory. Particularly, the notion of "empirical" expectation, as opposed to that of "causal" expectation, is deemed as the relevant one in order to build a system of mutual expectation in the case of norms; however, this concept does not help to explain how a norm comes out as an equilibrium of the social interaction, thus making the whole explanation arguably circular. We finally argue for the importance to ground the concept of norm on the dynamic evolution of expectations.

Growth with competing technologies and bounded rationality

I develop a model of growth based on three assumptions: first, a variety of technologies characterised by different degrees of labour skill intensity, where technological change is localized; second, agents are boundedly rational, and the aggregate rule of motion of their behaviour follows a replicator dynamics; third, markets do not clear instantaneously, with prices adjusting gradually. For simplicity, I study the case of two technologies and two labour markets, one for skilled and one for unskilled labour. The model is investigated by means of local stability and computer numerical analysis. Two types of steady states obtain, each characterised by the complete specialization of production into one of the two technologies. Convergence towards the low-growth steady state, associated with the unskilled labour intensive technology, occurs under adverse structural conditions, such as marked initial skill shortage and high skill upgrade costs. This result of lock-in to the inferior steady state is interpreted as co-ordination failure, in that market forces do not always provide sufficient incentives to ensure a high-growth path

Labour Market Rigidity and Economic Efficiency with Non-General Purpose Technical Change

The contrasting effects of labour market rigidity on efficiency are investigated in a model where technological change is non-general purpose and different types of skills are available to workers. Ex ante efficiency calls for high labour market rigidity, as this favours workers’ acquisition of specific skills which have higher productivity in equilibrium. Ex post efficiency calls for low market rigidity, as this allows more workers to transfer to the innovating sector of the economy. The trade-off between these two mechanisms results in an inverse-U shaped relationship between output and labour market rigidity, which implies that a positive level of labour market rigidity is in general beneficial for the economy.Non-general purpose technology, labour market rigidity, specific and general human capital

Growth with competing technologies and bounded rationality

I develop a model of growth based on three assumptions: first, a variety of technologies characterised by different degrees of labour skill intensity, where technological change is localized; second, agents are boundedly rational, and the aggregate rule of motion of their behaviour follows a replicator dynamics; third, markets do not clear instantaneously, with prices adjusting gradually. For simplicity, I study the case of two technologies and two labour markets, one for skilled and one for unskilled labour. The model is investigated by means of local stability and computer numerical analysis. Two types of steady states obtain, each characterised by the complete specialization of production into one of the two technologies. Convergence towards the low-growth steady state, associated with the unskilled labour intensive technology, occurs under adverse structural conditions, such as marked initial skill shortage and high skill upgrade costs. This result of lock-in to the inferior steady state is interpreted as co-ordination failure, in that market forces do not always provide sufficient incentives to ensure a high-growth path. <br><br> alternative title: Growth With Competing TechnologiesAnd Bounded Rationality

The Constitution of the Nonprofit Enterprise: Ideals, Conformism and Reciprocity

We provide an account of the non profit enterprise based on the motivations of the agents involved. Our main idea is that these are ex -post motivated by both self-interest and a conditional willingness to conform to their ex ante accepted constitutional ideology, which are weighed up in a comprehensive utility function. Ideology is shaped as the result of a hypothetical ‘social' contract between the relevant figures participating in the venture, in particular an entrepreneur, a worker, and a consumer who acts as a dummy beneficiary in the ex-post stage. It can thus be defined as a normative principle of fairness that boils down to a distributive social welfare function defined over the outcomes of a game, which permits to order them according to their conformity to the constitutional ideology. For conformist preferences depend upon expectations of reciprocal conformity to a normative principle, defined on social states described in as much they conform to an ideal, then the agents' model of choice asks for the adoption of the psychological games approach, where payoff functions range over not only the players' strategies but also their beliefs. If the conformist prompt to action is sufficiently strong then the outcome in which both the active agents perform an action improving the quality of the good with respect to the free market standard, thus maximising the surplus of the consumers, results in a psychological Nash equilibrium of the game. We associate this outcome, and the corresponding norm of behaviour, with the constitution of the non profit enterprise. We also show that the structure of the interaction is a coordination game, thus calling for the necessity of devices such as codes of ethics to solve the coordination problem. Keywords: Nonprofit, non-self-interested motivations, conformism, reciprocity, ideology.

A game-theoretic framework to study the influence of globalisation on social norms of co-operation

A game-theoretic framework is developed to study the evolution of social norms in a society. The two main theoretical assumptions underpinning the model are, first, that agents have some kind of “social” preferences, in addition to standard “self-interested” preferences. Second, individuals modify their behaviour over time in accordance to the “imitation of the most successful agent” paradigm. A stylised model of social interactions is developed, along with concepts of static and dynamic equilibria. After social preferences are specified in accordance with the normative expectation theory, an analysis of the type of equilibria in public goods interactions is provided. Finally, the impact on co-operation of a change in a society’s modes of behaviour, which may be seen as a result of migration or the impact of global communication media, is studied

Which relation between globalisation and individual propensity to co-operate? Some preliminary results from an experimental investigation

The paper reports on a theoretical framework for the study of the influence of globalisation on individual decision-making. The focus is on individual co-operative behaviour for the provision of public goods. First, I summarise relevant theories of globalisation and co-operation aiming to find a link between the two themes. Second, I illustrate the methodology of the research project “Globalisation, Co-operation and Trust: An Experimental Study”, which will carry out an international study on the subject. Finally, I report on some preliminary results from a pilot study of the project. The explanandum is individual propensity to co-operate measured in experiments of nested public goods problem. The main explanatory variables are four dimensions of individual access into globalisation processes, derived from a questionnaire. Of these four dimensions, the cultural and the social dimension of globalisation appear to have a strong explanatory power on individual co-operation rates, although they have different signs. The other two dimensions, economic and political, do not seem to have comprehensive explanatory power. The relationship with social identity is also analysed

Can labour market rigidity lead to economic efficiency? The technical change link

The extent to which labour market rigidity can be beneficial for an economy is investigated in a model where technological change is non-general purpose and different types of skills are available to workers. More precisely, specific skills lock a worker into a particular technology but increases productivity. Conversely, general skills allow workers to move across technologies at the cost of lesser productivity. Labour market rigidity is modelled as cross-sectors transfer costs for general skill workers. The main result is that a positive level of labour market rigidity is in general beneficial for the economy. In fact, ex post efficiency calls for low market rigidity, as this allows more workers to transfer to the innovating sector of the economy. Conversely, ex ante efficiency calls for high labour market rigidity, as this favours workers’ acquisition of specific skills, which increases output. The combination of these two effects results in an inverse-U shaped relationship between output and labour market rigidity. A necessary condition for this result to hold is that the acquisition of specific skills is ex ante costly, as the rent that must be paid in equilibrium to specific skill workers determines a gap in marginal productivity in favour of specific skill labour

Accounting for inequality in transition economies: an empirical assessment of globalisation, institutional reforms, and regionalisation

We analyze the causes and mechanisms of inequality in transition economies of Central and Eastern Europe and the Commonwealth of Independent States after the break-up of the Soviet Union. First, we show that both economic globalisation – namely, imports, exports, and foreign direct investment – and institutional factors – namely, privatisation reforms, labour market liberalisation, and product market liberalisation – are strongly associated with within-country rises in inequality. However, some of these factors are intertwined. Second, the impact of globalisation on inequality is negative (positive) at low (high) levels of human capital. Third, human capital appears to exert a uniformly positive effect on inequality at different stages of globalisation. Fourth, trade integration with the European Union is correlated with rises in inequality

On the Value of Participation: Endogenous Emergence of Social Norms in a Three-Player Ultimatum Game

We report results from two different settings of a 3-player ultimatum game. Under the monocratic rule, a player is randomly selected to make an offer to two receivers. Under the democratic rule, all three players make a proposal, and one proposal is then extracted. A majority vote is required to implement the proposal. Although the two rules are strategically equivalent, different patterns of behaviour seem to emerge as the number of interactions increase. Under the monocratic rule proposers seem to be entitled to claim a larger share of the pie, and receivers more likely to accept, in comparison with the democratic rule. We speculate that ‘institutions’ allowing more participation in the process of collective choice lead to more ‘socially responsible’ behaviour in the players.Majority ultimatum; participation; institutions; social norms