Image Versus Information: Changing Societal Norms and Optimal Privacy

<jats:p> 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. (JEL D82, D83, D91, Z13) /jats:p

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Work Title Image Versus Information: Changing Societal Norms and Optimal Privacy
Open Access
  1. S. Nageeb Ali
  2. Roland Bénabou
License In Copyright (Rights Reserved)
Work Type Article
  1. American Economic Association
Publication Date August 1, 2020
Publisher Identifier (DOI)
  1. 10.1257/mic.20180052
  1. American Economic Journal: Microeconomics
Deposited September 09, 2021




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