Social Norms and Economic Incentives in Firms

By Steffen Huck, Dorothea Kübler, Jörgen W. Weibull. Social Science Research Network, 2012

125 citations recorded by the source corpus.

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 different 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 incentive scheme. We also show how social norms can induce multiplicity of equilibria and how steeper economic incentives can reduce effort.

Subfields: Economics and Econometrics, Management Science and Operations Research, Safety Research

View Paper: https://www.semanticscholar.org/paper/a519c8eaef51ff7f0a740c928389ce2a405df896

Citations in the corpus

• What's the right thing to do? Increasing pro-sociality with simple moral nudges (2017, unknown): “This is in line with an emerging strand of research suggesting that people, in their decision-making, strive for balance between maximising their material payoff and doing what they think is the morally right thing to do (33,70-72).”