Strategic Behavior with Tight, Loose, and Polarized Norms

A large body of literature has shown that social norms can be a powerful driver of human actions, and norm interventions often focus on shifting beliefs about average or majoritarian behavior. This work addresses a less studied aspect of norms, namely the role that their strength, tightness, and degree of polarization play. In the context of strategic decision-making, we investigate both theoretically and empirically how behavior responds to different distributions of one's peers' behavior. We focus on the difference between tight (i.e., characterized by low behavioral variance), loose (i.e., characterized by high behavioral variance), and polarized (i.e., characterized by U-shaped behavior) norm environments. Our results show that in addition to the mean, the variance, and shape of the observed behavior matter. In particular, we find that variance in observed behavior begets variance in one's own behavior. Tight, loose, and polarized norms are thus self-sustaining. In addition, we find that personal values matter more for behavior in loose and polarized norm environments