Chapter 2. Social Norms and Preferences, Chapter for the Handbook for Social Economics edited by J. Benhabib, A. Bisin and M. Jackson

Social norms are often posited as an explanation of differences in economic behavior and performance of societies that are difficult to explain by differences in endowments and technology. Economists are often reluctant to incorporate social aspects into their analyses when doing so leads to models that depart from the standard model. I discuss ways that agents' social environment can be accommodated in standard models and the advantages and disadvantages of doing so.