Scandinavian Working Papers in Economics

Oslo University, Department of Economics

No 15/2014: Skewed Norms under Peer Pressure: Formation and Collapse

Moti Michaeli and Daniel Spiro ()
Additional contact information
Moti Michaeli: Department of Economics, and Center for the Study of Rationality, the Hebrew University,
Daniel Spiro: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: This paper shows that peer pressure may lead to dynamic convergence to a norm that is skewed with respect to preferences in society, yet is endogenously upheld by the population. Moreover, a skewed norm will often be more sustainable than a representative norm. This may explain the skewness of various social and religious norms. By furthermore interpreting a norm as a political regime, we show that biased regimes can be sustained even without the existence of a powerful group with coherent interests. We analyze the pattern by which political regimes collapse and relate it to contemporary revolutions and mass protests.

Keywords: Peer pressure; Social norm; Revolution; Protest movement; Alienation; Religion

JEL-codes: D02; D03; D72; D74; Z10; Z12

62 pages, June 30, 2014

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memo-15-2014.pdf PDF-file 

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