On social norms and beliefs: A model of manager environmental behavior

A prevailing view in the literature states that social sanctions can support, in equilibrium, high levels of obedience to a costly norm. The reason is that social disapproval and stigmati-zation faced by the disobedient are highest when disobedience is the exception rather than the rule in society. In contrast, the Bayesian model introduced here shows that, imperfect information causes the expected social sanction to be lowest precisely when obedience is more common. This, amongst other findings, draws a distinct line between social and moral norms, both of which may depend on others' behavior but not on action observabil-ity. The implications of the use of non-Bayesian belief formation rules by society, namely a representativeness rule (overweighting the signals) and conservativism (overweighting the prior), for payoff functions and equilibria are explored. (c) 2021 Elsevier B.V. All rights reserved.

Automated summary

The literature suggests that social sanctions can promote high levels of obedience to costly norms, but the Bayesian model shows that imperfect information leads to lower expected social sanctions when obedience is more common. This study also distinguishes between social and moral norms, both of which may rely on others' behavior rather than observability.