Social Norm Summary

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Professor Ariely enlightens the subject so as to how the human mind tends to lapse from the rational behavior, which in turn, reinforce each other and turn out to be totally predictable and systematic manners in which our minds are expected to act. Thus, a depiction of how behavioral economics differs from traditional economics. There is a focus on how the human mind is instigated so as to judge the relativity of value and prices that are unrelated to supply and demand, the relationship between economic norms of behavior and social ones, under the influence of strong emotions. The approach used is simple as well as straightforward, with is a light-hearted, jargon-free prose comprising of bold claims, thus is persuasive. Ariely makes use of …show more content…

The author points out that there are two different roles an individual has to enact, for satisfying the norms of both the arenas, wherein the norms of the arenas can’t be mingled. For example, it would be inappropriate, if a man would offer money to his mother-in-law for a sumptuous thanksgiving dinner cooked by her. Hence, we can’t apply market norms in situations involving families and close friendships, where social norms come in. The author shows his concern over the fact that if businesses are treated like a family, they shall fail to adhere to their social-norm responsibilities by laying off workers, reducing their benefits, augmenting self benefits and major focus on achieving maximum profits. He cites Google as an example, to portray how markets can benefit by inducing social norms. It is profoundly explained, that we wouldn’t undertake certain tasks, if we are paid to do them, which we would have readily done otherwise. For example, if an old man asks us to change the tire of his car for 1$, we would be reluctant do so. Though there is an important aspect regarding social norms. They are far more effective at motivating superior performance than there counterpart. As in armed forces, low rank soldiers are not motivated by the paycheck but by social norms. As evident from the various experiments conducted by professor Ariely, the performance levels differ when the reward

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