Abstract 

People often act prosocially and voluntarily conform to social and legal norms. This has fueled the idea that law can guide behavior through its expressive power. By contrast, we offer a theoretical and experimental framework suggesting that people strategically alter their decision-making environment to shift the norm applicable to their actions to one that is in their self-interest and to the detriment of others. Norm-shifting is one strategy within a broader concept we refer to as Behavioral Self-Management (BSM).

To test norm-shifting, we implement a dictator game in which Allocators are offered an effort task before allocating a sum between themselves and a Recipient. Allocators receive the same endowment whether or not they work. We hypothesize that many will undertake the task to shift the applicable fairness norm from equal division to an effort-based norm that justifies their retaining a larger share. Prior evidence shows that costly effort is widely perceived as legitimizing unequal outcomes.

We find that many Allocators decide to work, thereby reducing average transfers. Their work choices are strategic: their odds of working are higher the more they expect work to shift the fairness norm in their favor and the more prosocial they are—that is, the higher the moral costs they face for violating the fairness norm. Finally, Allocators who work make transfers that they expect to conform to an effort-based norm in the view of others, to maintain their self- and social-image.

Our findings have implications for compliance with the law and with social norms. BSM can enable selfish non-compliance by undermining the social norms that underpin the law or by establishing social norms that provide justification for violation, while avoiding the social disapproval that would otherwise result.  

Paper can be downloaded here.

Practicalities

This event will be held in person. The seminar will take place in Roeterseiland campus (REC) building A, room number A3.06.  

About the speaker 

Jennifer H. Arlen

Norma Z. Paige Professor of Law, NYU School of Law

Jennifer Arlen is internationally recognized expert on experimental law and economics, corporate criminal and regulatory enforcement, director liability under Caremark, and compliance. She is the founder and Faculty Director of both the NYU Program on Corporate Compliance and Enforcement and the NYU Center on Law, Economics and Organizations. Author of more than 50 scholarly publications, she also served as the Associate Reporter for Principles of the Law of Criminal, Civil, and Administrative Enforcement Against Individuals and Companies for Organizational Misconduct in the American Law Institute’s Principles of Law on Compliance and Enforcement for Organizations. She is past President of the American Law and Economics Association and the Society for Empirical Legal Studies (which she co-founded in 2005), and serves on the Editorial Board of the American Law and Economics Review. She has given keynote speeches around the world including at the OECD conference on corporate liability, Thai Anticorruption Commission’s annual conference and the European Conference on Empirical Legal Studies. Arlen received her B.A. in economics from Harvard College (1982, magna cum laude) and her J.D. (1986, Order of the Coif) and Ph.D. in economics (1992) from New York University. She has been a Visiting Professor at the California Institute of Technology, Harvard Law School, and Yale Law School, and was the Ivadelle and Theodore Johnson Professor of Law and Business at USC Gould School of Law before coming to NYU. She clerked for Judge Phyllis Kravitch on the U.S. Court of Appeals for the 11th Circuit. Arlen teaches Corporations, Business Crime, and a seminar on Corporate Crime and Financial Misdealing. She regularly teaches intensive graduate courses overseas on using regulatory and criminal liability to deter misconduct.

About ACLE

The Amsterdam Center for Law and Economics (ACLE) is a joint initiative of the Faculty of Economics and Business and the Faculty of Law at the University of Amsterdam. The objective of the ACLE is to promote high-quality interdisciplinary research at the intersection between law and economics.