Social Norms and Economic Institutions

Economists, philosophers, and legal scholars come together in Social Norms and Economic Institutions to examine how economists’ rational decision-making models are influenced by ethical values and social norms.   Economists find it difficult to include considerations of ethical values and social norms in their behavioral models, for these factors are neither goods nor constraints in the usual sense. And, while custom and social norms influence individual behavior, economists have not determined how they affect aggregate economic outcomes. Editors Kenneth J. Koford and Jeffrey B. Miller argue persuasively that these powerful societal and cultural forces influence decision making in important ways that cannot be captured by models that take into account only self-interested behavior.   The contributors address such questions as how norms change, how a common sense of fairness can survive in a world of heterogeneous values, how such principles can help to determine appropriate penalties for corporate misconduct, and how fairness can be an important element in determining a “fair” bargaining equilibrium in contract negotiations.   Sociologists, philosophers, business ethicists, legal scholars, and economists alike will appreciate the value of this volume in enriching their understanding of how ethical values and social norms can be incorporated in standard behavioral models.