Huck, S. and Kubler, D. and Weibull, J. (2003) Social norms and economic incentives in firms. (ELSE Working Papers 62). ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
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 three 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 crowding out.
| Type: | Working / discussion paper |
|---|---|
| Title: | Social norms and economic incentives in firms |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php#2003 |
| Language: | English |
| Keywords: | JEL classification: D23. Social norms, incentives, contracts |
| UCL classification: | UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics |
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