Norms, standards, rights

Abstract

European unification causes additional social interactions between citizens. These interactions are influenced not only by law but also by social norms in the various countries. This paper discusses how different social norms and different law systems work together, what the advantages of a uniform European law are and what kind of equilibria are to be expected. It is suggested that many social and legal norms can be best understood as standards with network externalities, creating separating equilibria, or one dominating equilibrium which may or may not be a welfare optimum but will nevertheless prevail over competing alternatives, driven by self-enforcing network advantages. Coordination against excess inertia or excess momentum and compensating people's losses in the standardization process may be an welfare improving activity of the state.