This article comes from Vox, a site devoted to research-based policy analysis and commentary from leading economists, from a European perspective. I wanted to share this because it's a newer interest in economics to look at cooperation rather than solely focusing on competition.
How cooperation evolves: History, expectations, and leadership
Daron Acemoglu Matthew O. Jackson
13 June 2011
Economists are increasingly recognising the importance of social norms in determining economic outcomes. While some argue that these norms are set in stone, this column introduces a new framework exploring how these norms emerge, how they can change, and how leadership by individuals can play a pivotal role.
Social norms, which create self-reinforcing expectations and patterns of behaviour, are the foundation of social life. In many economic, political, and social situations where coordination is important, different social norms, with sharply varying consequences, may emerge and persist. Different norms regarding how much others should be trusted constitute one important example. For instance, Banfield (1958) and Putnam (1993), among others, point out how social norms concerning trust in others and public institutions as well as participation in civic activities differ between the south and north of Italy. As such norms are critical factors in the growth and prosperity of societies, it is essential to understand their formation and evolution.
Though much existing research on these issues emphasises the "cultural" origins of social norms including differences in the extent of trust between different societies or different parts of the same nation, social norms are not cast in stone and do change. Locke (2002), for instance, provides examples both from the south of Italy and the northeast of Brazil, where starting from conditions similar to those emphasised by Banfield in the south of Italy, trust and cooperation appear to have emerged. Recent events in the Middle East underscore this point. A very long period of lack of collective action led many commentators and social scientists to conclude that collective political action, particularly in favour of democracy, were inconsistent with the cultural values of the Middle East. Yet, many countries in the region are now in the midst of highly coordinated protests and associated changes in social norms of political participation. In the examples of changes in social norms emphasised by Locke, as well as in the recent events in the Middle East, actions by a small group of individuals who assumed leadership positions in coordinating expectations and behaviour appear to have played a pivotal role.
Why do similar societies end up with different social norms, and why and how social norms sometimes change? A common approach to answering these questions is to use coordination games, which have multiple equilibria corresponding to different self-fulfilling patterns of behaviour and rationalise the divergent social norms as corresponding to these equilibria. For example, it can be an equilibrium for all agents to be generally trusting of each other over time, while it is also an equilibrium for no agent to trust anybody else in society. We can then associate the trust and no-trust equilibria with different social norms.
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