Essays on social pressure: choice and dis(honesty)

Abstract

Human behavior is strongly affected by social factors such as norms or social pressure, and economic decision making is not an exception. The impact of self and social image considerations is well documented in decisions ranging from contract enforcement to labor productivity. Therefore, understanding the social and moral dimensions of decisions remains an important topic in economic research. This dissertation includes different approaches, theoretical models and experimental designs, to provide insights regarding the impact of such concerns on both individual and collective choice. In the first chapter, we are interested in the micro-foundations of such concerns, and we explore it by extending the standard choice model to incorporate the social environment in decision making. We define different social environments, each with different social pressure levels a decision maker may feel while deciding. As proposed by experimental findings from different fields of research, the model assumes that individuals are more likely to comply with the norms when the social pressure is higher. We provide an axiomatization of the model and suggest a general form of utility representation. The key point of our representation is characterized by a monotone function which captures the intuition of this compromise in the following way: as social pressure increases the decision maker, if not more, cannot exhibit less concern for social image. Thus, the best option should move towards the norm. This choice data allows us to identify, although partially, the norm that applies to the decision problem at hand. The second chapter, takes the analysis of the previous one, one step further and let us reveal the norm to the full extent. We investigate the behavior of many individuals who have image concerns and have to make decisions in different social contexts. Moreover, by releasing the strict assumption on the alternative set, we provide a simple and natural measure of compromise rate. The final chapter complements the dissertation with experimental data that confirms that people are indeed take into account image considerations. Particularly, we are interested in the impact of advice on the lying behavior of the individuals. Although we don’t find any evidence that advice is used to manage one’s social image, it can be utilized to ease the psychological cost of dishonest behavior.