Norms, Rationality, and Communication: A Reputation Theory of Social Norms

Abstract

I attempt to explain social without relying on behavioral constraints (like habit) and normative motivations (like altruism). Instead, the reputation theory of social proposed here analyzes as mere social constructs: In strategie situations, rationality fails to provide clear guidance on how to act. Because individuais need to make decisions, they follow norms. Yet are subject to strategie manipulation; players can try to upset them by promoting alternative norm proposais. Two factors stabilize against this threat: network effects and preference compatibility. At the same time, they favor that foster cooperation among individuais as well as that overcome collective action problems. The reputation theory of social thus may help to resolve one of the anomalies of rational choice analysis the fact that collective action exists. Law and economies has given birth to another school of thought, and (social) normst Family relations tend to be conflict-laden. While parents aspire to leave an imprint perpetuating their personality and values, children often grow mature only by opposing to those views. Law and has been mummy's darling for some time before going through a phase of defiance.2 Still, many believe that and have not yet gained a lot of maturity.3 Seemingly, it has not developed much of a personality beyond the interest in its subject matter, social norms.4 In this paper, I consider one question that is to define and norm's character. Little surprisingly, it is at the same time a core component of and economies the rational choice paradigm.5 Law and can accept or waive the heritage of rational choice. In this paper, I undertake to defend rational choice as a foundation for positive and theory. 1 wish to thank Cass Sunstein who supervised the writing of an earlier version as an independent research project at the University of Chicago Law School. In addition, I have benefited greatly from comments by Gary Becker, Eric Posner, Jacob Hanisch, and Julia Pohlmeier on various drafts. Last not least, I am grateful to Jorg Wulftange and Steffen Wesche for our exchange of ideas on the sub ject. 1 See generally Eric A. Posner, U. Rieh. L. Rev. 2002, 465; Robert C. Ellickson, J.L.S. 27 (1998), 537, and Richard A. Posner, J.L.S. 27 (1998), 553 at 564f. See also the recent survey by Richard H. McAdams/Eric B, Rasmusen, Norms in Law and Economies, in: Handbook of Law and Economies, ed. A. M. Polinsky/S. Shavell, fortheoming 2006. The seminal contribution has been Robert C. Ellick son, Order without Law, 1991. In Germany, law and norms so far has not gained much attention, but see Holger Fleischer, ZHR 2004, 673 at 706. 2 The latter might be associated with the activist New Chicago School, see Lawrence Lessig, J.L.S. 27 (1998), 661; Cass R. Sunstein, Quinnipiac L. Rev. 15 (1995), 147; Cass R. Sunstein, Col. L. Rev. 96 (1996), 903, particularly at 907 (norm management) and 947ff.; Dan M. Kahan, Va. L.R. 83 (1997), 349. A recent, well-weighed assessment can be found in Robert C. Ellickson, Am. L. & Econ. Rev. 3 (2001), 1 at 30ff. 3 See Robert E. Scott, Va. L.R. 86 (2000), 1603. For its (limited) use in the theory of the firm see Oliver Hart, Penn. L. Rev. 149 (2001), 1701. 4 See Eric A. Posner, U. Rieh. L. Rev. 2002, 465 at 465. 5 For the critique of rational choice in the domain of and economies itself see Christine Jolls/Cass R. Sunstein/Richard H.Thaler, Stan. L. Rev. 50 (1998), 1471 and the other articles compiled in Cass R. Sunstein (ed.), Behaviorai Law and Economies, 2000. This content downloaded from 40.77.167.12 on Mon, 11 Apr 2016 13:44:23 UTC All use subject to http://about.jstor.org/terms