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Category_ID - 5
Doc_Title - Social Norms and Illicit Behavior: An Evolutionary Model of Compliance
Doc_Author - Timothy C. Haab, Kenneth E. McConnell
Doc_Number - AEDE-WP-0008-01
Doc_Start_Date - 06/13/2001
Doc_End_Date - 06/13/2002
Doc_URL_AddLocal - C:\WINNT\ACF1550.tmp
Tag_Functional - AED Econ Working Paper
Tag_SubUnit - Agricultural Economics,Policy
Tag_Program - NULL
Tag_Industry - Environmental
Tag_Misc - NULL
Tag_Resources - NULL
Tag_Practice - Markets,Policy

Economists have viewed the presence of externalities and other market failures as leading to a private equilibrium that would not be Pareto optimal. In the exploitation of common pool resources, especially biological resources, this would lead to the much-discussed ‘tragedy of the commons’. A challenge to this traditional view has emerged from a careful study of the theory and practice of the exploitation of common property resources. The existence of a social norm may provide an individual with information on the extent of external costs associated with a behavior, and thus provides an imperfect means of internalizing the external costs. In this paper we propose an evolutionary model of compliance that allows for the existence of a social norm. The impact of the social norm on public policy towards externalities is examined. Keywords: social norms, tragedy of the commons, externalities