Social and moral norms in the laboratory

Norms involve a shared understanding about what one ought to do in certain situations. Social norms involve observation by others and external sanctions for violations, while moral norms are internal and involve introspection and internal sanctions; our design attempts to disentangle their effects in the laboratory. In this study, we consider an allocation decision made by a dictator dividing a fixed sum within a three-person group, where we create a shared understanding by providing advice from subjects’ peers who have no financial payoff at stake. In a 2x2 design, we vary whether such advice is given, as well as whether behavior is observable, i.e., the choice made is publicly divulged to the other participants in the experiment. We find that people’s choices are in fact affected by a combination of observability and the shared understanding. Advice leads to more generous choices when choices are revealed. Our design explicitly shows that social norms play a role in participants’ decisions. The results are outside the realm of standard social-preference models; in particular, these are silent regarding whether a choice is made public.