Thinking Socially
Human sociality – tendency among humans
to associate and behave as members of
groups – affects decision making behavior
and has important consequences for
development.
Groups and even entire societies get stuck in
collective patterns of behavior such as
corruption, segregation, and civil war;
temporary interventions may have large,
lasting impacts.
Social component to thinking and decision
making – other regarding preferences –
social status seeking, identify with groups,
cooperation, etc.
Social norms – informal rules that govern
social behavior.
Fertility preferences, ragging, bullying,
corruption, punctuality – some examples of
social norms.
Social preferences and their implications
Social recognition, social incentives
Social rewards like status, recognition
motivates people to exert effort. E.g Thank
you card, congratulatory note from boss,
“employee of the month” status. Status
awards are specially useful when quality of
individual outputs is difficult to measure
precisely.
Altruism, Identity and Group dynamics
Some – genuinely care about others, some
are selfish. (Dictator game). What governs
someone’s act of generosity or selfishness?
Social proximity – members of aa group
would perceive even unknown members of
the group more positively than non-
members. Leaders of groups are more
generous towards members.
While this can support mutual prosperity,
they can also promote in-group favoritism
and out-group hostilities.
If identities are malleable rather than fixed,
interventions may be able to target social
identities as a means for changing behavior.
Cognitive behavior therapy – long lasting
impact. Can also affect destructive
consequences of negative social identities,
self-esteem problems associated with it.
Intrinsic Reciprocity and attainment of
collective goods
Public goods – standard theory – free riding
Not always
Instrumental reciprocity – responding
kindness with kindness
Intrinsic reciprocity – intrinsically motivated
willingness to punish or reward behavior of
others, often at a cost to oneself.
Ultimatum game – studies intrinsic
reciprocity.
Public goods game – punishing non
contributors personally costly, but their own
contributions increased.
People are conditional cooperators who
prefer to cooperate to the degree others are
cooperating. Although proportion of
cooperator may vary, they make up a sizable
proportion. Not all are free riders.
Conditional cooperators – useful for
managing common property resources. JFM
Building in opportunities for people to
observe other people’s behavior , i.e making
behaviors more public may increase
cooperation.
Community management often more
successful than top down govt management.
“Crowd in” vs “Crowd out”- often some
policies aimed at increasing cooperation may
have opposite effect. E.g fines for being late.
So, predicting the effect of an incentive may
be challenging for policy makers.
Social networks – individual decision making
Social networks are the set of actors and
relational ties that form the building blocks
of human social experience.
Reinforce existing behavior, Transmit novel
information and normative pressure, spark
social change. Both stabilize and shift
patterns of behavior.
Social networks are the basis of social order.
Success of microfinance – channel social
pressure.
Increasing interactions to support new
behavior
Targeting specific individuals to lead and
amplify social change – tap into social
learning
Social norms – individual decision making
Social Norms – broadly shared beliefs about
what group members are likely to do and
ought to do.
Norms for every behavior – dating, smoking,
dressing, when to sit, when to be angry,
when to discuss personal matters, when and
how to express affection, etc.
Norms – not chosen by individuals, but they
abide by them. Often historical
circumstances, self-reinforcing, regardless of
whether they improve welfare or not. E.g
punctuality, age of marriage. Breaking a
social norm – shame, stigma.
Social desirability bias in surveys
Altering those social norms which contribute
to undesirable outcomes – policy goal.
Difficult as norms are very sticky.
Designing policy to work around the
behavioral effects of social norms
Where to locate public schools in
Pakistan
Marketing existing social norms to shift
behavior
Increasing awareness – marketing, Beti
Bachao Beti Padhao.
Tax compliance – conditional cooperation,
fairness, reciprocity. Strengthening these
concerns may increase compliance more
than penalties. In fact, crackdown may
have a negative impact – creates a
impression that tax evasion is the norm.
Activating norms to shift behavior
Making it okay to protest something
Changing social norms to shift
behavior
Law and then persistent awareness
campaigns. Eg smoking, recycling. These
have very long-term effects on
preferences and behavior.
Efficacy of laws changing norms have
limits.
Role of mass media
Role of entertainment industry
