How do informal norms affect rule compliance: Experimental evidence

Abstract

I use a dictator game experiment to show that an individual’s compliance with an egalitarian formal rule depends on his/her group’s informal norms. A group of dictators communicate with each other to decide the “guideline” for the amount of money to send to their matched recipients. This guideline functions as the group’s informal norm and significantly affects the sending behavior of dictators despite being non-binding. Next, an egalitarian formal rule is introduced that requires dictators to send at least half of their money to a matched recipient. Dictators are less likely to obey the egalitarian rule if they are in groups with more selfish norms.