TY  - JOUR
AU  - Acemoglu, Daron
AU  - Jackson, Matthew O
TI  - History, Expectations, and Leadership in the Evolution of Social Norms
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17066
PY  - 2011
Y2  - May 2011
DO  - 10.3386/w17066
UR  - http://www.nber.org/papers/w17066
L1  - http://www.nber.org/papers/w17066.pdf
N1  - Author contact info:
Daron Acemoglu
Department of Economics, E52-446
Massachusetts Institute of Technology
77 Massachusetts Avenue
Cambridge, MA 02139
Tel: 617/253-1927
Fax: 617/253-1330
E-Mail: daron@mit.edu

Matthew O. Jackson
Department of Economics
Stanford University
Stanford, CA 94305-6072
Tel: 650 723 3544
E-Mail: jacksonm@stanford.edu
AB  - We study the evolution of the social norm of "cooperation" in a dynamic environment. Each agent lives for two periods and interacts with agents from the previous and next generations via a coordination game. Social norms emerge as patterns of behavior that are stable in part due to agents' interpretations of private information about the past, which are influenced by occasional past behaviors that are commonly observed. We first characterize the (extreme) cases under which history completely drives equilibrium play, leading to a social norm of high or low cooperation. In intermediate cases, the impact of history is potentially countered by occasional "prominent" agents, whose actions are visible by all future agents, and who can leverage their greater visibility to influence expectations of future agents and overturn social norms of low cooperation. We also show that in equilibria not completely driven by history, there is a pattern of "reversion" whereby play starting with high (low) cooperation reverts toward lower (higher) cooperation.
ER  -