Strategic Behavior with Tight, Loose, and Polarized Norms

59 Pages Posted: 16 Mar 2022 Last revised: 3 Nov 2023

See all articles by Eugen Dimant

Eugen Dimant

University of Pennsylvania; CESifo

Michele Joy Gelfand

University of Maryland

Anna Hochleitner

University of Nottingham

Silvia Sonderegger

University of Nottingham

Multiple version iconThere are 2 versions of this paper

Date Written: November 2, 2023

Abstract

Descriptive norms -- the behavior of other individuals in one's reference group -- play a key role in shaping individual decisions in managerial contexts and beyond. Organizations are increasingly using information about descriptive norms to nudge positive behavior change. When characterizing peer decisions, a standard approach in the literature is to focus on average behavior. In this paper, we argue both theoretically and empirically that not only averages but also the shape of the whole distribution of behavior can play a crucial role in how people react to descriptive norms. Using a representative sample of the U.S. population, we experimentally investigate how individuals react to strategic environments that are characterized by different distributions of behavior, focusing on the distinction between tight (i.e., characterized by low behavioral variance), loose (i.e., characterized by high behavioral variance), and polarized (i.e., characterized by u-shaped behavior) environments. We find that individuals indeed strongly respond to differences in the variance and shape of the descriptive norm they are facing: loose norms generate greater behavioral variance and polarization generates polarized responses. In polarized environments, most individuals prefer extreme actions -- which expose them to considerable strategic risk -- to intermediate actions that minimize such risk. Furthermore, in polarized and loose environments, personal traits and values play a larger role in determining actual behavior. These nuances of how individuals react to different types of descriptive norms have important implications for company culture, productivity, and organizational effectiveness alike.

Keywords: Cooperation, Descriptive Norms, Peer Effects

JEL Classification: C91, D01

Suggested Citation

Dimant, Eugen and Gelfand, Michele Joy and Hochleitner, Anna and Sonderegger, Silvia, Strategic Behavior with Tight, Loose, and Polarized Norms (November 2, 2023). Available at SSRN: https://ssrn.com/abstract=4004123 or http://dx.doi.org/10.2139/ssrn.4004123

Eugen Dimant (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://sites.google.com/view/eugendimant/

CESifo ( email )

Poschinger Str. 5
Munich
Germany

Michele Joy Gelfand

University of Maryland ( email )

1142 Biology-Psychology Building
College Park, MD 0742-4411
United States
301 405 6972 (Phone)

Anna Hochleitner

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Silvia Sonderegger

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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