Social and moral norms in the laboratory

Social norms involve observation by others and external sanctions for violations, while moral norms involve introspection and internal sanctions. We develop a simple model of individual preferences that incorporates moral and social norms. We then examine dictator choices, where we create a shared understanding by providing advice from peers with no financial payoff at stake. We vary whether advice is given, as well as whether choices are made public. This design allows us to explicitly separate the effects of moral and social norms. We find that choices are in fact affected by a combination of observability and the shared understanding.