2020

Social Norms in Networks

Reprint No. 2020:6

Author(s): Philip Ushchev and Yves ZenouYear: 2020 Title: Journal of Economic Theory Volume (No.): 185 (January)
Online article (restrictions may apply)
Preliminary version


Although the linear-in-means model is the workhorse model in empirical work on peer effects, its theoretical properties are understudied. In this study, we develop a social-norm model that provides a microfoundation of the linear-in-means model and investigate its properties. We show that individual outcomes may increase, decrease, or vary non-monotonically with the taste for conformity. Equilibria are usually inefficient and, to restore the first best, the planner needs to subsidize (tax) agents whose neighbors make efforts above (below) the social norms. Thus, giving more subsidies to more central agents is not necessarily efficient. We also discuss the policy implications of our model in terms of education and crime.


Reference:
Ushchev, Philip and Yves Zenou (2020), "Social Norms in Networks". Journal of Economic Theory 185(January), .

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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