IDENTIFYING SOCIAL NORMS USING COORDINATION GAMES:WHY DOES DICTATOR GAME SHARING VARY? Erin L.Krupka Roberto A.Weber University of Michigan University of Zurich Abstract we intr changes in behavior across seve eral variants of the dictator game.including data from a nove experiment and from prior published laboratory studies.that are unaccounted for by most curren theories of social pre eover,we find that norm compliance and willingness to sacrifice money to take behaviors that are socially appropriate.(JEL:C91.C72. D64) 1.Introduction Social norms have long been recognized as an important influence on behavior in social sciences such as social psychology (Sherif 1936;Cialdini.Reno,and Kallgren 9)and sociology(Merton 7:Coleman9).However in ec onomics norms have received significant attention only relatively recently,mainly as a tool fo explaining seemingly anomalous behavior such as involuntary unemployment(Akerlot 1980),conformity (Bernheim 1994),costly punishment (Fehr and Gachter 2000). tipping(Conlin,Lynn,and O'Donoghue 2003),and macroeconomic phenomena,such why consumption may track income even when wealth levels remain unaffected of2007 One possible reason for the relative absence of social norms in economics is that they are difficult to measure or quantify,making it hard to predict the precise influence they will exert on behavior.As a result,social norms are usually incorporated into economic research as post-hoc interpretations for behavior or outcomes that are The editor in charge of this paper was Stefano DellaVigna iversity's Cente ns of Human Soc e D: DellaVigna.Ulrike Malmendier.an mous referee and part nts a cral wor .seminars.and s for helpful co pka is a ch Fellow at IZA. E-mail:ekrupka@umich.edu (Krupka);roberto.weber@econ.uzh.ch (Weber) D010.1111jcea.12006
IDENTIFYING SOCIAL NORMS USING COORDINATION GAMES: WHY DOES DICTATOR GAME SHARING VARY? Erin L. Krupka University of Michigan Roberto A. Weber University of Zurich Abstract We introduce an incentivized elicitation method for identifying social norms that uses simple coordination games. We demonstrate that concern for the norms we elicit and for money predict changes in behavior across several variants of the dictator game, including data from a novel experiment and from prior published laboratory studies, that are unaccounted for by most current theories of social preferences. Moreover, we find that the importance of social norm compliance and of monetary considerations is fairly constant across different experiments. This consistency allows prediction of treatment effects across experiments, and implies that subjects have a generally stable willingness to sacrifice money to take behaviors that are socially appropriate. (JEL: C91, C72, D64) 1. Introduction Social norms have long been recognized as an important influence on behavior in social sciences such as social psychology (Sherif 1936; Cialdini, Reno, and Kallgren 1990) and sociology (Merton 1957; Coleman 1990). However, in economics social norms have received significant attention only relatively recently, mainly as a tool for explaining seemingly anomalous behavior such as involuntary unemployment (Akerlof 1980), conformity (Bernheim 1994), costly punishment (Fehr and Gachter 2000), ¨ tipping (Conlin, Lynn, and O’Donoghue 2003), and macroeconomic phenomena, such as why consumption may track income even when wealth levels remain unaffected (Akerlof 2007). One possible reason for the relative absence of social norms in economics is that they are difficult to measure or quantify, making it hard to predict the precise influence they will exert on behavior. As a result, social norms are usually incorporated into economic research as post-hoc interpretations for behavior or outcomes that are The editor in charge of this paper was Stefano DellaVigna. Acknowledgments: The authors thank the Ford Foundation, IZA, and Carnegie Mellon University’s Center for Behavioral Decision Research for financial support. We also gratefully acknowledge support from the research priority program at the University of Zurich “Foundations of Human Social Behavior.” We thank Nicholas Bardsley, Colin Camerer, Cristina Bicchieri, Ted O’Donoghue, Tanga McDaniel, Stefano DellaVigna, Ulrike Malmendier, anonymous referees, and participants at several workshops, seminars, and conferences for helpful comments and suggestions. Krupka is a Research Fellow at IZA. E-mail: ekrupka@umich.edu (Krupka); roberto.weber@econ.uzh.ch (Weber) Journal of the European Economic Association June 2013 11(3):495–524 c 2013 by the European Economic Association DOI: 10.1111/jeea.12006
496 Journal of the European Economic Association otherwise difficult to explain (Fehr and Gachter 2000:Ostrom 2000),and they are tified primarily by r eoretically related to the norm (Fehr and Fischbacher 2004:Camerer and Fehr 2004).Because norms are usually studied indirectly in economics,they are rarely used to form precise predictions about behavior I In this paper,we aim to put the horse (norm)before the cart(behavior),by introd ed method for identifyings ial behavior separately use this method to measure social norms in several economi choice contexts,and then use these elicited norms to predict behavior a priori.We do so in the context of other-regarding behavior in variants of the "dictator game",where recent laboratory experiments demonstrate that minor contextual features of a choice environment lead to substantially different choices and outcomes.We show that such changes in behavior are ent ly cons sistent with varying social norms and with a stabl preference for complying with social norms Rather than attempting to develop a theory of norm compliance based on underlying preferences,as in prior research.3 we start with the assumption that individuals care about behaving in a manner consistent with social norms.More precisely,we assum ion makers'utility is ha ased on the mo they obtain an on the degree to which their actions comply with social nomms,in the form of taking actions generally viewed as socially appropriate and avoiding those viewed as socially inappropriate.We then show that these two considerations-combined with a novel. incentivized method for identifying social norms that uses coordination games explain significant beha iation in dictator g contribut games.Thus our primary the cal,one We present and sulting changes in behavior that are consistent with the apreference for complying alizin m such labora t leas tiall or com orm ior in and to ryin For the labora s are identi he reason why ome e might sh are in one dictator e nt but not i e same as why one tips at a cof shop but not at a f d restauran Fot examnle Andreoni and Bemnheim (2009) plore situations in which one individual unilaterally avior that Csntstromindividualscarigaboutom 15 ously defined al c(r). n which there is im plicitly a ent that it is the edge that x ma that norms change ac ss contexts.and ount for changes in behavior
496 Journal of the European Economic Association otherwise difficult to explain (Fehr and Gachter 2000; Ostrom 2000), and they are ¨ identified primarily by measuring behaviors that are theoretically related to the norm (Fehr and Fischbacher 2004; Camerer and Fehr 2004). Because norms are usually studied indirectly in economics, they are rarely used to form precise predictions about behavior.1 In this paper, we aim to put the horse (norm) before the cart (behavior), by introducing a novel incentivized method for identifying social norms separately from behavior. We use this method to measure social norms in several economic choice contexts, and then use these elicited norms to predict behavior a priori. We do so in the context of other-regarding behavior in variants of the “dictator game”, where recent laboratory experiments demonstrate that minor contextual features of a choice environment lead to substantially different choices and outcomes.2 We show that such changes in behavior are entirely consistent with varying social norms and with a stable preference for complying with social norms. Rather than attempting to develop a theory of norm compliance based on underlying preferences, as in prior research,3 we start with the assumption that individuals care about behaving in a manner consistent with social norms. More precisely, we assume decision makers’ utility is based on the money they obtain and on the degree to which their actions comply with social norms, in the form of taking actions generally viewed as socially appropriate and avoiding those viewed as socially inappropriate. We then show that these two considerations—combined with a novel, incentivized method for identifying social norms that uses coordination games— can explain significant behavioral variation in dictator games. Thus, our primary contribution is an empirical, rather than theoretical, one. We present and demonstrate 1. A few experimental studies manipulate the likely presence or strength of a social norm by varying features of a choice context (Krupka and Weber 2009; Andreoni and Bernheim 2009) and demonstrate resulting changes in behavior that are consistent with the influence of a norm or a preference for complying with a norm. 2. This apparent “instability” in behavior has led some researchers to question the value of generalizing from such laboratory experiments to the field (Levitt and List 2007). Our work at least partially addresses this concern by demonstrating how such behavior corresponds to varying and identifiable social norms. The sensitivity of behavior in the laboratory to the context of the experiment can be interpreted in a manner similar to how behavior in the field is sensitive to context and to varying social norms. For the laboratory data analyzed in this paper, we demonstrate that such sensitivity may be explained once varying social norms are identified. Therefore, the reason why someone might share in one dictator experiment but not in another very similar one might be the same as why one tips at a coffee shop but not at a fast-food restaurant, or in the United States but not in Europe. 3. For example, Andreoni and Bernheim (2009) explore situations in which one individual unilaterally shares wealth with another, and model a norm as the behavior that results from individuals caring about own wealth, intrinsically about fairness, and about how others perceive their concern for fairness. Their paper assumes an exogenously defined alternative (xF), on which there is implicitly agreement that it is the “fair” action for the decision maker to take, and they follow prior research in assuming that the equal (50–50) division of wealth is a natural reference point. They then show why pooling may occur at this alternative (as well as at other alternatives, under changing conditions). Andreoni and Bernheim acknowledge that xF may differ across contexts, and may thus account for varying behavior. This is similar to our main argument, that norms change across contexts, and can therefore account for changes in behavior, and suggests that our identification of what actions people agree upon as “appropriate” or “inappropriate” might provide an empirical basis for something like xF in their model
Krupka and Weber Identifying Social Norms Using Coordination Games 497 the usefulness of a novel method for norm elicitation by showing that the elicited social norms-when included as a component of utility in a conditional logit choice model- can account rather well for behavioral changes in experimental data.Moreover,we also show that the weights placed on money and norm compliance.in the estimated utility tant willingness to trade off roughly $5 of wealth in order to take actions that are socially appropriate. rather than socially inappropriate.The stability of these preferences thus allows a- priori predictions to be generated for new dictator-game contexts,once one obtains measures of the social appropriateness of different actions. We be defining cial no and mple utility fra ework for understanding their potential influence on choice.We then demonstrate how one can use coordination games to identify the social norms that make up one source of utility Using our utility framework,we show how the social norms we elicit from one set of individuals with the coordination games yield precise and testable predictions regarding the behavior of a new pe of particip nts,which we evaluate both with novel data from ew experi ment a d also using data from previously published experiment We find that the observed sensitivity of behavior to several surprising experimental treatments can be almost entirely explained by variations in social norms. We choose to study behavior in dictator games primarily for two reasons.First the simplicity and non- -strategic nature of the dictator game make it easy to establish altemative enviro nts in hich ca hold timportant tures of the choice faced by a decision maker(such as the set of possible payoffs and experimenta subjects'understanding of how actions map into payoffs),while varying the context in a way that is likely to influence norms.The nonstrategic nature of the dictator game also allows us to rule out the possibility that changes in behavior are due to changes in subjects'expectations about h oponents will behave.as would potentially be the case in a public goods.prisoner's dilemma,or trust games. Second,a primary motivation in our research is to provide an interpretation for several recent experiments in economics(Dana,Weber,and Kuang 2007;List 2007: Bardsley 2008:Lazear,Malmendier,and Weber 2012),all of which use variants of the dictator game.These experiments show that alternative treatments that make seemingly trivial or irrelevant ch s to the hoices ailable to a dictator evertheles surprising changes in behavior.We provide at least one possible account for these changes.Indeed,part of the value in our approach is that it can provide an explanation for why behavior changes across dictator-game variants in a manner not adequately accounted for by most current theories of social preferences.Thus,rather than adding to the literatur on social pr b ndu be differen leadin models.we puposely study simple decision contexts between whichthes oftheccount for all be variaon in bhavior acro the variants of the dictator game that we study here
Krupka and Weber Identifying Social Norms Using Coordination Games 497 the usefulness of a novel method for norm elicitation by showing that the elicited social norms—when included as a component of utility in a conditional logit choice model— can account rather well for behavioral changes in experimental data. Moreover, we also show that the weights placed on money and norm compliance, in the estimated utility parameters in the conditional logit model, demonstrate a fairly constant willingness to trade off roughly $5 of wealth in order to take actions that are socially appropriate, rather than socially inappropriate. The stability of these preferences thus allows apriori predictions to be generated for new dictator-game contexts, once one obtains measures of the social appropriateness of different actions. We begin by defining social norms and presenting a simple utility framework for understanding their potential influence on choice. We then demonstrate how one can use coordination games to identify the social norms that make up one source of utility. Using our utility framework, we show how the social norms we elicit from one set of individuals with the coordination games yield precise and testable predictions regarding the behavior of a new sample of participants, which we evaluate both with novel data from a new experiment and also using data from previously published experiments. We find that the observed sensitivity of behavior to several surprising experimental treatments can be almost entirely explained by variations in social norms. We choose to study behavior in dictator games primarily for two reasons. First, the simplicity and non-strategic nature of the dictator game make it easy to establish alternative environments in which we can hold constant important features of the choice faced by a decision maker (such as the set of possible payoffs and experimental subjects’ understanding of how actions map into payoffs), while varying the context in a way that is likely to influence norms. The nonstrategic nature of the dictator game also allows us to rule out the possibility that changes in behavior are due to changes in subjects’ expectations about how opponents will behave, as would potentially be the case in a public goods, prisoner’s dilemma, or trust games. Second, a primary motivation in our research is to provide an interpretation for several recent experiments in economics (Dana, Weber, and Kuang 2007; List 2007; Bardsley 2008; Lazear, Malmendier, and Weber 2012), all of which use variants of the dictator game. These experiments show that alternative treatments that make seemingly trivial or irrelevant changes to the choices available to a dictator nevertheless produce surprising changes in behavior. We provide at least one possible account for these changes. Indeed, part of the value in our approach is that it can provide an explanation for why behavior changes across dictator-game variants in a manner not adequately accounted for by most current theories of social preferences.4 Thus, rather than adding to the literature on social preferences by conducting a “horse race” between different leading models, we purposely study simple decision contexts between which these 4. In the Online Appendix, we consider several leading models of social preferences, and show that none of them can directly account for all the variation in behavior across the variants of the dictator game that we study here
498 Journal of the European Economic Association models often fail to discriminate,and show that empirically-measured differences in social norms across these co By applying our norm elicitation method to our own and others'dictator game data,we offer a unified interpretation of the behavioral changes observed across several experiments while simultaneously demonstrating the usefulness of the elicitation technique that we introduce.We also highlight the benefits of re-examining data from test novel the and interpreta as opposed to uniquely cons ering novel data generated solely for the purposes of a current test. We should also note that,while this paper is the first to introduce the coordination game-based elicitation method for identifying social norms,the approach has already been used in other papers.For example,Burks and Krupka(2012)ap ply the method in a real firm,to study social norms regarding behavior tow ard cli sers an es in perceived socia norms correlate with job dissatisfaction.In another example,Gachter,Nosenzo,and Sefton (2012)use our method to elicit social norms in a setting where two workers provide costly effort to a firm,in a "gift-exchange"setting.They elicit norms to demonstrate that it is more socially ap ropriate to work hard when the other worker exerts high effort,and compare the predictive ability of social norms to othe social preferences. The next section presents our method for identifying social norms.Sections 3-5 demonstrate the usefulness of this method for predicting and explaining behavior in nonstrategic choice environments.Finally.in the conclusion.we discuss related work that validates the orm elicitation method. 2.Defining and Identifying Social Norms Following Elster(1989),we note two important features of social norms.First,socia norms generally prescribe or proscribe behaviors or actions,rather than outcomes As Elster notes,"The simplest social norms are of the type:Do X,or:Don't do X.' (p.99).Allowing norms to govern actions.rather than outcomes.suggests that two actions that produce the same outcome,but differ in other respects,may be governed cial econd,the cial" element of no orms req t they be jointly recognized,or collectively perceived,by members of a population.These two features of social norms -that they apply to actions rather than outcomes and that they irical input that can imp ofsoarTm omo to provide a basis for While singl data is valuable for the purpos
498 Journal of the European Economic Association models often fail to discriminate, and show that empirically-measured differences in social norms across these contexts correspond to observed differences in behavior.5 By applying our norm elicitation method to our own and others’ dictator game data, we offer a unified interpretation of the behavioral changes observed across several experiments while simultaneously demonstrating the usefulness of the elicitation technique that we introduce. We also highlight the benefits of re-examining data from prior experiments to test novel theories and interpretations, as opposed to uniquely considering novel data generated solely for the purposes of a current test.6 We should also note that, while this paper is the first to introduce the coordination game-based elicitation method for identifying social norms, the approach has already been used in other papers. For example, Burks and Krupka (2012) apply the method in a real firm, to study how social norms regarding behavior toward clients differ between financial advisers and their supervisors, and show that mismatches in perceived social norms correlate with job dissatisfaction. In another example, Gachter, Nosenzo, and ¨ Sefton (2012) use our method to elicit social norms in a setting where two workers provide costly effort to a firm, in a “gift-exchange” setting. They elicit norms to demonstrate that it is more socially appropriate to work hard when the other worker also exerts high effort, and compare the predictive ability of social norms to other social preferences. The next section presents our method for identifying social norms. Sections 3–5 demonstrate the usefulness of this method for predicting and explaining behavior in nonstrategic choice environments. Finally, in the conclusion, we discuss related work that validates the norm elicitation method. 2. Defining and Identifying Social Norms Following Elster (1989), we note two important features of social norms. First, social norms generally prescribe or proscribe behaviors or actions, rather than outcomes. As Elster notes, “The simplest social norms are of the type: Do X, or: Don’t do X.” (p. 99). Allowing norms to govern actions, rather than outcomes, suggests that two actions that produce the same outcome, but differ in other respects, may be governed by different social norms. Second, the “social” element of norms requires that they be jointly recognized, or collectively perceived, by members of a population. These two features of social norms—that they apply to actions rather than outcomes and that they 5. Our approach might also serve as a valuable complement to existing theoretical approaches, providing a useful empirical input that can improve their ability to distinguish between environments that differ in social norms. For example, the norms that we empirically elicit could be incorporated into existing models of social norms, such as those by Lopez-Perez (2008) or Andreoni and Bernheim (2009) to provide a basis for why certain actions are considered “fair” or “compliant” with a norm, or to provide a basis for expectations in non-strategic settings (Battigali and Dufwenberg 2007). 6. While most experimental studies in economics (and psychology) limit their attention to a single dataset (usually generated by the authors), using additional, pre-existing data is valuable for the purposes of demonstrating robustness and generalizing findings beyond a particular experimental study. For other papers that employ this approach, see Camerer, Ho, and Chong (2004) and Hyndman et al. (2012)
Krupka and Weber Identifying Social Norms Using Coordination Games 499 must be jointly recognized-are present in most researchers'definitions(Bettenhausen and Murnighan 1991;Fehr and Gachter 2000).For example,Ostrom (2000)defines social norms as"shared understandings about actions that are obligatory,permitted, or forbidden"(pp.143-144,emphasis added). Frther,we distinguish regarding what norms,from customs or actions that people regularly take,or descriptive norms.Both kinds of norms influence behavior(Cialdini,Reno,and Kallgren 1990:Krupka and Weber 2009).However,our focus here is on injunctive social norms-that is,those described by Elster as prescribing what one“should do'”or“should not do'”.Asw will show,(injun tive)social n the appropr eness of behavio r ar sufficient for explainingaconsiderable amount of variation in other-regarding behavior Therefore.following the literature.we define (injunctive)social norms as collective perceptions,among members of a population.regarding the appropriateness of different behaviors.They are things that people in the population jointly recognize one should or should not do,and people wh o belong to the populatio expec thers to be aware of and understand this agreement.The power of s cial norms col mes both from the willingness of people within the population to punish(or reward)others'deviation from(or adherence to)them and from the experience of positive or negative emotions produced by one's own adherence or deviation from a social norm (Elster 1989:Fehr nd Gachter 2000;Lopez-Perez2008). To formalize tion,let A=(a.....ax)repre ent a set of K action available to a decision maker.A social norm,N(ag)[-1,1],is an empirically measurable collective judgment that assigns to each action a degree of appropriateness or inappropriateness.Therefore,we assume that if for an action,ag,there is collective recognition that the action constitutes"appropriate."or socially prescribed.behavior V(ag)>0,while if the recogniti that an acti s"inapprop ate or socially proscribed, havior,N(ak)<0.Thu con tent with the above definitions of social norms,N(a)identifies the degree to which a specific action.a.is collectively perceived as one that should or should not be taken. An important feature of the above definition,and where we depart from some prior work,is that a norm is not necessarily a binary classification,such that a particular ction(the"norm”,eg "tip 20%" orthe 50-50 split")should be taken,by as sumptio leaving all remaining actions as those (equally inappropriate)actions that should no be taken (Lopez-Perez 2008).Instead,our definition of a social norm applies to the entire set of possible actions,and allows actions to vary in the degree to which they are perceived as appropriate.Thus,we can characterize a social norm by the profile of eness r er all the act ailable toa decision m r.Fo exampl ere may be social agreement that it is always appropriate to arrive on ti me i many Western cultures.there may be some instances in which amriving five minutes late is less socially inappropriate (meeting friends at a bar)than others(arriving at a funeral).We will also see that representing social norms as a profile of appropriateness igning N(a)=I to only one action
Krupka and Weber Identifying Social Norms Using Coordination Games 499 must be jointly recognized—are present in most researchers’ definitions (Bettenhausen and Murnighan 1991; Fehr and Gachter 2000). For example, Ostrom (2000) defines ¨ social norms as “shared understandings about actions that are obligatory, permitted, or forbidden” (pp. 143–144, emphasis added). Further, we distinguish norms regarding what one “ought” to do, or injunctive norms, from customs or actions that people regularly take, or descriptive norms. Both kinds of norms influence behavior (Cialdini, Reno, and Kallgren 1990; Krupka and Weber 2009). However, our focus here is on injunctive social norms—that is, those described by Elster as prescribing what one “should do” or “should not do”. As we will show, (injunctive) social norms concerning the appropriateness of behavior are sufficient for explaining a considerable amount of variation in other-regarding behavior. Therefore, following the literature, we define (injunctive) social norms as collective perceptions, among members of a population, regarding the appropriateness of different behaviors. They are things that people in the population jointly recognize one should or should not do, and people who belong to the population expect others to be aware of and understand this agreement. The power of social norms comes both from the willingness of people within the population to punish (or reward) others’ deviation from (or adherence to) them and from the experience of positive or negative emotions produced by one’s own adherence or deviation from a social norm (Elster 1989; Fehr and Gachter 2000; Lopez-Perez 2008). ¨ To formalize our definition, let A = {a1,..., aK } represent a set of K actions available to a decision maker. A social norm, N(ak ) ∈ [−1, 1], is an empirically measurable collective judgment that assigns to each action a degree of appropriateness or inappropriateness. Therefore, we assume that if for an action, ak , there is collective recognition that the action constitutes “appropriate,” or socially prescribed, behavior, N(ak ) > 0, while if there is joint recognition that an action constitutes “inappropriate”, or socially proscribed, behavior, N(ak ) < 0. Thus, consistent with the above definitions of social norms, N(ak ) identifies the degree to which a specific action, ak , is collectively perceived as one that should or should not be taken. An important feature of the above definition, and where we depart from some prior work, is that a norm is not necessarily a binary classification, such that a particular action (the “norm”, e.g., “tip 20%” or “the 50–50 split”) should be taken, by assumption leaving all remaining actions as those (equally inappropriate) actions that should not be taken (Lopez-Perez 2008).7 Instead, our definition of a social norm applies to the entire set of possible actions, and allows actions to vary in the degree to which they are perceived as appropriate. Thus, we can characterize a social norm by the profile of appropriateness ratings over all the actions available to a decision maker. For example, while there may be social agreement that it is always appropriate to arrive on time in many Western cultures, there may be some instances in which arriving five minutes late is less socially inappropriate (meeting friends at a bar) than others (arriving at a funeral). We will also see that representing social norms as a profile of appropriateness 7. Such a definition is possible in our framework by, for example, assigning N(ak ) = 1 to only one action (the “norm”) and letting all other actions have a constant value of N(ak ) = 0