The erosion of personal norms and cognitive dissonance |
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Authors: | Vicente Calabuig Gonzalo Olcina Fabrizio Panebianco |
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Affiliation: | 1. Faculty of Economics, University of Valencia and ERI-CES, Valencia, Spain;2. Paris School of Economics, Paris, France |
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Abstract: | In this article, we study how personal norms and behaviour interact and evolve when agents try to reduce cognitive dissonance, and how this dynamic relates to Nash equilibrium. We find that in long run, agents play, and norms prescribe, Nash equilibrium in material payoffs (in the absence of norms). Our model captures two main facts: (i) norms erode along the play of the game; (ii) the erosion of norms depends on the set of possible economic choices, so that the policy maker can potentially influence them. |
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Keywords: | Cognitive dissonance Nash equilibrium dominant strategies norm dynamics |
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