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Norms, ethics, philosophy: norms define which actions are permitted, advisable or prohibited when certain circumstances are present. The philosophical discussion deals mainly with questions of its justification.

Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

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Economic Theories on Norms - Dictionary of Arguments

Parisi I 167
Norms/Economic theories/Wangenheim: Social norms and their evolution have been widely discussed in economics. The argument on stability of norms in evolutionary settings starts by rather simple situations with only two alternative behaviors, of which one becomes a social norm (see for example the overview articles by Ostrom, 2000(1), and Elster 1989(2) as well as the seminal book by Ullman-Margalit, 1977)(3). It has been extended in particular in relation to experimental game theory in which the obvious existence of norms had to be explained (Fehr and Schmidt, 1999(4); Fehr and Fischbacher, 2004(5); Bolton and Ockenfels, 2000(6)).
Indirect evolution: The indirect evolutionary approach (Güth and Yaari, 1992(7); Güth, 1995(8); Güth and Ockenfels, 2000(9)), which separates preferences from fitness but lets preferences evolve according to the fitness of the actions they induce for rational agents, suggests itself for modeling the evolution of norms, if they are interpreted as preferences deviating from material pay-offs. Dekel et al. (2007)(10) offer very general results on the stability of norms in such settings with various degrees of information on the preferences of other individuals.
Parisi I 168
Influence of law on norms: Parisi and Wangenheim (2006)(11) show in an interactive opinion formation model with an ordered set of possible social norms that law may not only trigger the evolution of social norms in the same direction as the law goes but also
Parisi I 169
in the reverse direction. This may occur particularly when legal change is too far from social norms and thus triggers hidden or open opposition. They also show that legal strategies like front-loading the enforcement of legal rules may avoid such countervailing effect - possibly only at high costs, though.
Carbonara et al. (2008a(12), 2008b(13)) study such strategies against countervailing effects of social norms on legislation in more detail. Carbonara et al. (2012)(14) elaborate on the double function of law - incentives and expression of a majority's opinions affecting internalization of norms - and dwell on their interplay.

1. Ostrom, E. (2000). "Collective Action and the Evolution of Social Norms." Journal of Economic Perspectives 14: 137-158.
2. Elster, J. (1989). "Social Norms and Economic Theory." Journal of Economic Perspectives 3:
3. Ullman-Margalit, E. (1977). The Emergence of Norms. Oxford: Clarendon Press.
4. Fehr, E. and K. M. Schmidt (1999). "A Theory of Fairness, Competition and Cooperation."
Quarterly Journal of Economics 114: 817-868.
5. Fehr, E. and U. Fischbacher (2004). "Social Norms and Human Cooperation." Trends in cognitive Sciences 8: 185-190.
6. Bolton, G. E. and A. Ockenfels (2000). "ERC: A Theory of Equity, Reciprocity, and Competition." American Economic Review 90: 166-193.
7. Güth, W. and M. Yaari (1992). "An Evolutionary Approach to Explain Reciprocal Behavior in a Simple Strategic Game," in U. Witt, ed., Explaining Process and Change - Approaches to Evolutionary Economics, 23-34. Ann Arbor, MI: University of Michigan Press.
8. Güth, W. (1995). "An Evolutionary Approach to Explaining Cooperative Behavior by Reciprocal Incentives." International Journal of Game Theory 24:323-344.
9. Güth, W. and A. Ockenfels (2000). "Evolutionary Norm Enforcement." Journal of Institutional and Theoretical Economics 156: 33 5-347.
10. Dekel, E., J. C. Ely, and O. Yilankaya (2007). "Evolution of Preferences." Review of Economic
studies 74:685-704.
11. Parisi, F. and G. v. Wangenheim (2006). "Legislation and Countervailing Effects from Social
Norms," in C. Schubert and G. v. Wangenheim, eds., Evolution and Design of Institutions,
25-55. London: Routledge.
12. Carbonara, Emanuela, Francesco Parisi, and Georg von Wangenheim (2008a). "Lawmakers as Norm Entrepreneurs." Review of Law and Economics 4:779-799.
13. Carbonara, E., F. Parisi, and G. von Wangenheim (2008b). "Legal Innovation and the Compliance Paradox." Minnesota Journal of Law, Science and Technology 9: 837-860.
14. Carbonara, E., F. Parisi, and G. v. Wangenheim (2012). "Unjust Laws and Illegal Norms."
International Review of Law and Economics 32: 285-299.

Wangenheim, Georg von. „Evolutionary Law and Economics.” In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press

Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments
The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
Economic Theories
Parisi I
Francesco Parisi (Ed)
The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017

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