S. Nageeb Ali
411 Kern Bldg, Penn State University
University Park, PA 16802
Information about this author at RePEc
NBER Working Papers and Publications
|April 2016||Image Versus Information: Changing Societal Norms and Optimal Privacy|
with Roland Bénabou: w22203
We analyze the costs and benefits of using social image to foster virtuous behavior. A Principal seeks to motivate reputation-conscious agents to supply a public good. Each agent chooses how much to contribute based on his own mix of public-spiritedness, private signal about the value of the public good, and reputational concern for appearing prosocial. By making individual behavior more visible to the community the Principal can amplify reputational payoffs, thereby reducing free-riding at low cost. Because societal preferences constantly evolve, however, she knows only imperfectly both the social value of the public good (which matters for choosing her own investment, matching rate or legal policy) and the importance attached by agents to social esteem and sanctions. Increasing publicity...