Predictably irrational chapter 4 notes PDF

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econ predictably irrational...

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Chapter 4: Cost of social norms 

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People will work more for CAUSE than for CASH o Ex. Dragging in circles into squares for $1 and free  Free people do more o Ex. Lawyers offer free services or $30  Lawyers did it for free, but not for $30 o B/c of social norms, they were willing to volunteers; with market norms, lawyers found $30 lacking Gifts keep us in the social exchange world and away from market norms Thinking about salary vs. neutral sentences o Thinking about $ made the group more self-reliant and less willing to ask for help, ALSO less willing to help others (basically they were more selfish and selfreliant) Paying fines for picking up children late at the day care o Before: social norms; parents felt guilty about picking up children late, so they became more prompt o After: market norms; paying fines, parents chose to be late o Final: fine was removed, but parents continued to pick up their kids late o Social relationships are not easy to reestablish COMPANIES also tries to establish social norms with their employees by encouragement of social rewards and reputation o But short-term profits, outsourcing and cost cutting undermine creating the social norms o When employees do sth for the company by putting other stuff (Ex. Family stuff) aside, then they must get sth in return: support when they’re sick, childcare, pensions, medical benefits→ increase worker’s productivity o BUT a lot of companies are replacing social with market norms  That's why company loyalty is so lacking these days o Companies like google offer wide variety of benefits → goodwill created by emphasizing social side of the company-worker relationship o SUMMARY: corporations start thinking in social norms → builds loyalty and make workers want to extend themselves to the company → workers more flexible, concerned and willing to pitch in Police officers, firefighters, soldiers work on social norms: pride in their profession and sense of duty that motivates them to risk their lives and health...