The Covenants We Live By: Normative Social Influence on Behavior
Erin L. Krupka Collective Intelligence Conference, NY Stern School 2016
“David and Tonya are both advisors who talk sometimes. David tells Tonya that he has two clients who are husband and wife who have decided to implement his recommendations. This has resulted in the client agreeing to purchase several financial products: life insurance, disability income, and IRA with mutual funds, and a cash management mutual fund. David and his clients have been working on this together for several months. While there were some tensions because the clients felt that the paper work was not moving fast enough, the paperwork for these purchases was now completed and the $400,000 check had been given to David. Getting ready to submit everything later that day, David notices that both the clients failed to put their initials on one line. David knows that the clients have been bothered by all the paper work, and that it was important to complete the transaction before their departure the next day on vacation. David knows that the business will not be accepted by the home office without the initials. When Tonya asks David what he did, David tells her that the he was afraid the clients would walk away if he had to bother them again, so he initialed for both of them.”**
Question: What do their workers think that they *ought* do in this situation?
Question: What do their workers think that they *ought* do in this situation?
More generally: How would you figure out what the norms of a group are when • They are not codified • Infractions are rare or hard to observe • They vary from one group to another • Members may not be willing to say what they are
Definition A social norm involves socially shared belief regarding the appropriateness or inappropriateness of a particular behavior in a situation.
A few finer points….. 5
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Social constructs that rely on a shared knowledge about appropriate actions to take in a situation.
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Social constructs that rely on a shared knowledge about appropriate actions to take in a situation.
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Social constructs that rely on a shared knowledge about appropriate actions to take in a situation.
Divisions of 100 pennies between two people:
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100-0 75-25 50-50 25-75 0-100
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Social constructs that rely on a shared knowledge about appropriate actions to take in a situation.
Harness coordination games to identify social norms (Schelling ’60; Mehta et al. ‘94, Sugden ‘95)
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Social constructs that rely on a shared knowledge about appropriate actions to take in a situation.
Harness coordination games to identify social norms (Schelling ’60; Mehta et al. ‘94, Sugden ’95; Krupka and Weber ‘13)
2. What is considered a norm can vary from group to group and situation to situation…. We need to be explicit about different reference groups (Krupka et al. ‘13, ‘16)
Describe a scenario including the available actions Elicit social norms by measuring “social consensus” regarding appropriateness of actions or behaviors – Subjects rate “social appropriateness” of each action Incentive to match others’ responses (Schelling 1960, Mehta et al. 1994) – Target: Financial Advisor – Target: Corporate Leader
1. Tanya nods, but does not say anything to David. She does not report him to a compliance officer. 2. Tanya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer. 3. Tanya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to tell her about that again, or she will have to report him to a compliance officer. She does not report him to a compliance officer. 4. Tanya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer. 5. Tanya nods, but does not say anything else to David. She then reports him to a compliance officer. 6. Tanya tells David that she doesn’t think that initialing for them was the right thing to do. She tells him that she has to report him to a compliance officer. She then reports him to a compliance officer. 12
You have a chance to earn additional money by matching responses: Your responses will be compared with that of someone selected at random who is a financial advisor.
Tonya’s choices
Very socially Inappropriate
Somewhat Socially inappropriate
Somewhat socially appropriate
Very Socially appropriate
(Study Use only) Response matches Partner’s?
1. Tonya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer.
Y N ($10) ($0)
2.Tonya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer.
Y N ($10) ($0)
You have a chance to earn additional money by matching responses: Your responses will be compared with that of someone selected at random who is a financial advisor.
Tonya’s choices
Very socially Inappropriate
Somewhat Socially inappropriate
Somewhat socially appropriate
(Study Use only) Response matches Partner’s?
Very Socially appropriate
1. Tonya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer.
Y N ($10) ($0)
2.Tonya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer.
Y N was($10) the ($0)
Actions: “Tonya tells David that she doesn’t think that initialing for them right thing to do. She does not report him to a compliance officer.“
You have a chance to earn additional money by matching responses: Your responses will be compared with that of someone selected at random who is a financial advisor.
Tonya’s choices
Very socially Inappropriate
Somewhat Socially inappropriate
Somewhat socially appropriate
Very Socially appropriate
(Study Use only) Response matches Partner’s?
1. Tonya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer.
Y N ($10) ($0)
2.Tonya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer.
Y N ($10) ($0)
You have a chance to earn additional money by matching responses: Your responses will be compared with that of someone selected at random who is a financial advisor.
Tonya’s choices
Very socially Inappropriate
Somewhat Socially inappropriate
Somewhat socially appropriate
Very Socially appropriate
(Study Use only) Response matches Partner’s?
1. Tonya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer.
Y N ($10) ($0)
2.Tonya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer.
Y N ($10) ($0)
Describe a scenario including the available actions Elicit social norms by measuring “social consensus” regarding appropriateness of actions or behaviors – Subjects rate “social appropriateness” of each action Incentive to match others’ responses (Schelling 1960, Mehta et al. 1994) – Target: Financial Advisor – Target: Corporate Leader
You have a chance to earn additional money by matching responses: Your responses will be compared with that of someone selected at random who is a financial advisor.
Target
Tonya’s choices
Very Socially Inappropriate
Somewhat Socially inappropriate
Somewhat socially appropriate
Very Socially appropriate
(Study Use only) Response matches Partner’s?
1. Tonya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer.
Y N ($10) ($0)
2.Tonya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer.
Y N ($10) ($0)
You have a chance to earn additional money by matching responses: Your responses will be compared with that of someone selected at random who is a corporate leader.
Target
Tonya’s choices
Very Socially Inappropriate
Somewhat Socially inappropriate
Somewhat socially appropriate
Very Socially appropriate
(Study Use only) Response matches Partner’s?
1. Tonya tells David that she doesn’t think that initialing for them was the right thing to do. She does not report him to a compliance officer.
Y N ($10) ($0)
2.Tonya tells David that she doesn’t think that initialing for them was the right thing to do and that she doesn’t want David to do that again or she will have to report him to a compliance officer. She does not report him to a compliance officer.
Y N ($10) ($0)
Interpreting the norms ratings w. targets Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) CEO (n=1) Region VP (n=1)
20
Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
CEO (n=1) Region VP (n=1) Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
FA actual norms
Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) 21
CEO (n=1) Region VP (n=1) Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
Corporate leadership’s desired norms
Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) 22
CEO (n=1) Region VP (n=1) Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
Corporate leadership’s beliefs about FA norms
Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) 23
CEO (n=1) Region VP (n=1) Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
FA beliefs about corporate leadership’s desired norms
Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) 24
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00
H4: Significant misalignment over some actions
0.67 0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 25
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00
H4: Significant misalignment over some actions
0.67 0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 26
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00
H4: Significant misalignment over some actions
0.67 0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 27
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00
H4: Significant misalignment Actions Tanya could have over some actions taken
0.67 0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 28
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00 0.67
H4:Mean Significant ratingsmisalignment given by overwhen somecoordinating actions advisors with other advisors
0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 29
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00 0.67
Mean ratings given by H4: Significant misalignment corporate leadership when over some actions coordinating with other leadership members
0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 30
Actual Adviser Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario (mean evaluations with standard errors) Converted Appropriateness Ratings
1.33 1.00
H4: Significant misalignment Significant over misalignment some actions over some actions
0.67 0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Desired Norms for Adviser Behavior 31
CEO (n=1) Region VP (n=1) Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
FA beliefs about corporate leadership’s desired norms
Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) 32
Adviser Beliefs about Leaders’ Desired Norms and Leaders’ Desired Norms in the Whistle Blowing Scenario Converted Appropriateness Ratings
1.33 1.00 0.67
Differences are small. Advisers know what is desired!
0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Adviser Beliefs about Leaders' Desired Norms for Adviser Behavior Leaders' Desired Norms for Adviser Behavior
33
CEO (n=1) Region VP (n=1) Branch manager
Branch manager
Branch manager
Financial Advisors
Financial Advisors
Financial Advisors
N=9 N=45
Corporate leadership’s beliefs about FA norms
Who are the subjects? – 1) The majority of our subjects are financial advisors – 2) Management (Branch manager, Regional VP, Senior VP and CEO) 34
Actual Adviser Norms and Leaders’ Beliefs about Adviser Norms in the Whistle Blowing Scenario Converted Appropriateness Ratings
1.33 1.00 0.67
Differences are small. Leaders understand what adviser norms are!
0.33 0.00 -0.33
Action #1
Action #2
Action #3
Action #4
Action #5
Action #6
-0.67 -1.00 -1.33 Actual Adviser Norms Leaders' Beliefs About Adviser Norms
35
Introduce a method for identifying social norms Powerful and does not require large samples to obtain accurate measures.
Introduce a method for identifying social norms Powerful and does not require large samples to obtain accurate measures. Mechanism (coordination games) for aggregation that identifies a collective heuristic
Introduce a method for identifying social norms Powerful and does not require large samples to obtain accurate measures.
Mechanism for aggregation: Form Community Hierarchy Team Market ????
Relations Trust/Gift Reputation Money Sociality
Selection Rules Authority Vote Bet Reputation Impact Norms
Introduce a method for identifying social norms Powerful and does not require large samples to obtain accurate measures. Mechanism (coordination games) for aggregation that identifies a collective heuristic
The social norm itself is a profile – Allows us to distinguish between degrees of appropriateness (not captured by point-estimate) – Point estimate may not vary in certain domains, but appropriateness of departure from point estimate may vary – Variance in coordination success rate also yields insights.
Introduce a method for identifying social norms Powerful and does not require large samples to obtain accurate measures. Mechanism (coordination games) for aggregation that identifies a collective heuristic
The social norm itself is a profile The social norm itself is a collective heuristic – Allows the collective to act intelligently because it reduces coordination costs – Allows the collective to navigate trade offs intelligently
What are the big open questions (what am I publishing now)? There is still little consensus on how they emerge What institutional features affect norms in predictable ways Design (institutions, mechanism design)
What are the big open questions (what am I publishing now)? There is still little consensus on how they emerge What institutional features affect norms in predictable ways Design (institutions, mechanism design) What are the forces determining their content How they are transmitted (pollination and pollution) How are they maintained
What are the big open questions (what am I publishing now)? There is still little consensus on how they emerge What institutional features affect norms in predictable ways Design (institutions, mechanism design) What are the forces determining their content How they are transmitted (pollination and pollution) How are they maintained
