may affect the way in which people think about themselves, i.e. they may affect which
preference ordering becomes salient in a given situation.
In other words, the susceptibility of preferences to elicitation, framing, anchoring, and
identity primes implies that legal institutions and the prevailing interaction patterns may
influence human behaviour not only by affecting constraints and beliefs, but also by affecting
preferences. In this view, social institutions do not just impose constraints and shape beliefs
about others’ behaviour, but are also preference-elicitation devices, frames, and anchors that may
render particular identities, and thus particular values and normative commitments, more salient.
3. The Potential Economic and Social Consequences of Endogenous Preferences
The impact of social practices and institutions on preferences may have far-reaching
consequences, but we still know far too little to trace these consequences with any certainty. This
section has, therefore, a more speculative nature. Based on evidence that suggests that “society”
influences preferences, we speculate about potentially important implications of these findings.
The reader may thus view this section as the outline of a research program that finally aims at
identifying the hypothesized implications empirically.8
3.1. Endogenous Preferences and the Persistence of Inequality between Social Groups
Take, for example the finding in Hoff, Kshetramade and Fehr (2011), published in this
symposium, that suggests that low-caste status has a negative influence on the willingness to
sanction social norm violations altruistically. Compared to a member of a high-status caste, a
member of a low-status caste is less willing to punish a social norm violation that hurts a
member of his own caste “community” (in the sense of the Hindu word jati, the endogamous
group within which most social relationships occur). This negative influence of low caste status
persists even if we control for wealth, education, and the strength of the prevailing social norms.
Both low and high castes consider it as a clear violation of a social norm if an individual does not
reciprocate a favour and, thus, both expect harsh punishment of the norm violation by third
parties. Nevertheless, third parties from low castes show a markedly lower propensity to punish
8 The interested reader may also consult Etzioni (1985) and Saez-Marti and Zilibotti (2008) who describe further
implications of endogenous preferences.
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