Are Incentives Good Enough to Achieve (Info) Social Order?

Abstract

In this paper, the role of incentives in social order is questioned, based on a notion of incentive as additional individual utility, provided by an external entity, to actions achieving global utility. Two notions of norms are compared: (1) inputs which modify agents’ decisions through incentives (sanctions) and (2) prescriptions to execute obligatory action for intrinsic motivations. Two types of agents which reason upon norms are also compared: (1) incentive based rational deciders, and (2) normative agents which are prescribed to execute norms for intrinsic reasons. The two types of agents are expected to have a different impact on norm compliance. Under suboptimal conditions of application of sanctions (uncertian punishment), transgression is expected to propagate more easily and rapidly among incentive-based agents than among normative agents. In particular, incentive-based agents are expected to show a fast decline and even a collpase in compliance with the norms. Normative agents are expected to exhibit an oscillating behaviour, or at least a graceful degradation of compliance. Finally, the role of incentives is shown to have a lesser impact on natural social agents than expected by a model of rational decision. What is worse, incentives have been shown to produce even negative effects on several aspects of social learning and norm compliance.