Image versus information: Changing societal norms and optimal privacy

S. Nageeb Ali, Roland Bénabou

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We analyze the costs and benefits of using social image to foster desirable behaviors. Each agent acts based on his intrinsic motivation, private assessment of the public good, and reputational concern for appearing prosocial. A Principal sets the general degree of privacy, observes the social outcome, and implements a policy: investment, subsidy, law, etc. Individual visibility reduces free riding but makes aggregate behavior ("descriptive norm") less informative about societal preferences ("prescriptive norm"). We derive the level of privacy (and material incentives) that optimally trades off social enforcement and learning, and we characterize its variations with the economy's stochastic and informational structure.

Original languageEnglish (US)
Pages (from-to)116-164
Number of pages49
JournalAmerican Economic Journal: Microeconomics
Volume12
Issue number3
DOIs
StatePublished - Aug 2020

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Fingerprint Dive into the research topics of 'Image versus information: Changing societal norms and optimal privacy'. Together they form a unique fingerprint.

Cite this