Interventions with Sticky Social Norms: A Critique

• 成果类型: Article
• 署名作者: Dutta, Rohan; Levin, David K.; Modica, Salvatore
• 署名单位: McGill University; European University Institute; Washington University (WUSTL); University of Palermo
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvab015
• 发表日期: 2022
• 页码: 39-78
• 关键词: communication; INFORMATION; incentives; ECONOMICS; collusion

摘要

We study the consequences of policy interventions when social norms are endogenous but costly to change. In our environment, a group faces a negative externality that it partially mitigates through incentives in the form of punishments. In this setting, policy interventions can have unexpected consequences. The most striking is that when the cost of bargaining is high, introducing a Pigouvian tax can increase output-yet in doing so increase welfare. An observer who saw that an increase in a Pigouvian tax raised output might wrongly conclude that this harmed welfare and that a larger tax increase would also raise output. This counter-intuitive impact on output is demonstrated theoretically for a general model and found in case studies for public goods subsidies and cartels.