History, Expectations, and Leadership in the Evolution of Social Norms

60 Pages Posted: 13 May 2011 Last revised: 19 Sep 2014

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Matthew O. Jackson

Stanford University - Department of Economics; Santa Fe Institute

Date Written: September 2014

Abstract

We study the evolution of a social norm of `cooperation' in a dynamic environment. Each agent lives for two periods and interacts with agents from the previous and next generations via a coordination game. Social norms emerge as patterns of behavior that are stable in part due to agents' interpretations of private information about the past, influenced by occasional commonly-observed past behaviors. For sufficiently backward-looking societies, history completely drives equilibrium play, leading to a social norm of high or low cooperation. In more forward-looking societies, there is a pattern of 'reversion' whereby play starting with high (low) cooperation reverts toward lower (higher) cooperation. The impact of history can be countered by occasional 'prominent' agents, whose actions are visible by all future agents and who can leverage their greater visibility to influence expectations of future agents and overturn social norms of low cooperation.

Keywords: cooperation, coordination, expectations, history, prominence, leadership, overlapping generations, repeated games, social norms

JEL Classification: C72, C73, D7, P16, Z1

Suggested Citation

Acemoglu, Daron and Jackson, Matthew O., History, Expectations, and Leadership in the Evolution of Social Norms (September 2014). MIT Department of Economics Working Paper No. 11-10, Available at SSRN: https://ssrn.com/abstract=1839768 or http://dx.doi.org/10.2139/ssrn.1839768

Daron Acemoglu (Contact Author)

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Matthew O. Jackson

Stanford University - Department of Economics ( email )

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