Centre for Development Economics
Department of Economics, Delhi School of Economics


Peer Monitoring, Ostracism and the Internalization of Social Norms (with David K. Levine and Salvatore Modica) 


Rohan Dutta
McGill University

25th July 2018 (Wednesday) at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited

We study the consequences of endogenous social norms that overcome public goods problems by providing incentives through peer monitoring and ostracism. We examine incentives both for producers and for monitors. The theory has applications to organizational design - offering possible explanations for why police are rotated between precincts while professional organizations such as doctors are self-policing. It leads to a Lucas critique for experiments and natural experiments - a small level of intervention may be insufficient to produce changes in social norms while a high level of intervention may have a very different effect because it becomes desirable to change social norms. Finally, we study the internalization of social norms - showing how on the one hand it makes it possible to overcome incentive problems that pure monitoring and punishment cannot, and on the other how it leads to an interesting set of trade-offs.


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