Sönke Ehret (University of Bern, HEC Lausanne) (webinar)
26 November 2020 @ 14:00
“Social Spillovers in Polarized Populations”
Abstract: In recent years, social norm change has been added to the policy toolkit, alongside nudges and other choice architecture interventions, as a means for engendering widespread shifts in beliefs or behaviors in a society. Social norm interventions are particularly effective when a small intervention has outsized effects on a society through endogenous “spillovers” to the rest of the population. However, theoretical models show a wide range of outcomes is possible. Ordinary forms of individual heterogeneity, such as pre-existing identities, can severely limit the use of spillovers as a policy tool. We test the empirical predictions of these models in a virtual coordination experiment where we assess the implications of political identities for endogenous norm change. Specifically, we use political labels in the highly polarized context of the U.S. to create variation in the attachment to otherwise arbitrary actions in the coordination experiment. Within this setup, we create endogenous spillover incentives that are in conflict with the political preferences of the population, and furthermore, exploit the recent US presidential election as a source of exogenous variation. Using this study and its findings can help to further examine the possibilities and limitations of the use of spillovers to achieve policy goals, if there is considerable heterogeneity in a population.