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Review of Law & Economics

Editor-in-Chief: Parisi, Francesco

Ed. by Cooter, Robert D. / Gómez Pomar, Fernando / Kornhauser, Lewis A. / Parchomovsky, Gideon / Engel, Christoph

3 Issues per year


CiteScore 2016: 0.22

SCImago Journal Rank (SJR) 2016: 0.197
Source Normalized Impact per Paper (SNIP) 2016: 0.355

Online
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1555-5879
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Volume 11, Issue 3 (Nov 2015)

Issues

On the Complementarity between Law and Social Norms

Atsushi Tsuneki
  • Corresponding author
  • Institute of Social and Economic Research, Osaka University, 6–1 Mihogaoka, Ibaraki, Osaka, 567–0047, Japan
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/ Yoshinobu Zasu
  • Faculty of Economics, Kansai University, 3-3-35 Yamatecho, Suita-shi, Osaka, 564–8680, Japan
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Published Online: 2015-08-27 | DOI: https://doi.org/10.1515/rle-2013-0002

Abstract

This article aims to clarify the relationship between the law and social norms and examine how they interact – whether the law completely replaces, or coexists with, the pre-existing social norms. We model a close-knit society consisting of injurers and victims, assuming that both the law and social norms maximize social welfare and that the costs of enforcing legal penalties are greater than those of enforcing social norms. We find that social norms completely replace the law, even in a non-cooperative Nash equilibrium; we then develop exceptions to this result. In particular, when community sanctions for violating social norms are calibrated without consideration of its marginal social benefit due to a reduction in law enforcement cost, our model can have multiple equilibria, including cases in which legal sanctions persist even in the long run, in spite of their inefficiently high enforcement costs. However, we also show that this possibility of an inefficient non-cooperative equilibrium can be eliminated if the government behaves as a Stackelberg leader for the formation of social norms.

Keywords: social norms; legal sanctions; welfare maximization hypothesis; complementarity

JEL Classification Codes: K10; K42.

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About the article

Published Online: 2015-08-27

Published in Print: 2015-11-01


Funding: This research is financially supported by Grant-in-Aid for Scientific Research No. 26490046 from the Japan Society for the Promotion of Science.


Citation Information: Review of Law & Economics, ISSN (Online) 1555-5879, ISSN (Print) 2194-6000, DOI: https://doi.org/10.1515/rle-2013-0002.

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