Most individuals obey social norms out of fear of social disapproval and/or desire for social approval. Others obey social norms because the prescribed behavioral rules have been internalized and, hence, their violation generates intrinsic costs independent of the scrutiny of others. We experimentally investigate individuals’ propensities to break rules in order to enrich themselves at the expense of others. We consider three rule-breaking scenarios – theft, bribery and embezzlement – in the absence of any formal enforcement mechanism. By manipulating the extent to which rule breaking is observable to others, and to which “members of the community” can express informal approval and disapproval, we isolate the potential role that social shaming and/or rewarding might play in preventing rule-breaking vis a vis internalized costs.
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