On the regulation of social norms

A model is developed to understand how norms can be influenced by "norm ent repreneurs," for example, lawmakers, government agencies, unions, etc. Two instruments of influencing the dynamics of norm-following behavior are anal yzed, namely transforming the (monetary) incentives and changing the meanin g or the reputational value of following a norm. Both forms of norm regulat ion are incorporated into Akerlof's model of social custom (1980), and the comparative static properties of norm destruction and norm creation for dif ferent types of norms are derived. In particular, it is shown how norms sho uld be regulated when almost everybody follows them and when they take the form of bandwagon and snob norms.