Doctoral Dissertation Research in DRMS - The Predictive Power of Beliefs: Testing a Norm-Based Utility Function

Rutgers University New Brunswick, New Brunswick NJ

Investigators

Abstract

The purpose of the present work is to test an operationalization of norms proposed by Dr. Cristina Bicchieri, which embeds this concept into the rational actor model from decision theory. In a series of two studies, the researchers will test whether two often-cited effects in the social dilemma literature (the influence of social cues and group membership) can be accounted for by their impact on participants' beliefs about the existing social norm, as defined by Dr. Bicchieri and measured using procedures she developed. In a third study, the researchers will test the ability of Dr. Bicchieri's norm-based utility function to predict cooperation behavior across social dilemma tasks. If successful, this would support the usefulness of embedding norms into the rational choice model (as behavioral economists have been doing with other "social preferences"). Lastly, a fourth study will test Dr. Bicchieri's claim that the norms that solve coordination problems (where self and social interests dovetail) are sustained via a different mechanism than those that solve social dilemmas (where self and social interests diverge). In particular, we will observe whether third-party reward, punishment, and compensation behavior differs as a function of the type of norm necessary to reach the socially optimal outcome. Evidence in line with our predictions would support Dr. Bicchieri?s dichotomy of norms into two types and present another method for detecting the existence of norms other than belief elicitation. The norms of an environment influence people's expectations about what is commonly done and what is commonly approved or disapproved. These expectations can subsequently influence a person's actions as norm-abiding behavior is informally rewarded and violations are punished (starting with gossip, ostracism, and then exclusion). From a policy perspective, efforts aimed at improving the welfare of society by introducing formal rules will benefit from an examination of the current informal rules governing a group's actions. To the extent that the existing informal rules legitimize the formal ones, the cost of enforcing the new formal rules will be lower and vice versa. However, the concept of norms remains imprecise, and real-world applications remain infeasible, without an operational definition and a model of their impact on behavior.