Norm compliance in an uncertain world

In many situations, pro-social norms govern behavior. While the existence of a pro-social norm may be clear to someone entering the situation, it is often less clear precisely how much effort is required in order to comply with the norm. We investigate how people react to uncertainty about which effort level implements the prevailing norm using a modified version of the dictator game. Since the behavioral effects of pro-social norms are tightly linked to the degree of anonymity in a situation, we also vary the extent to which subjects’ behavior is observable. We find that when behavior is anonymous, uncertainty about which effort level implements the norm reduces aggregate norm compliance. However, when others can observe behavior, introducing a small degree of implementation uncertainty increases aggregate norm compliance. This implies that norm implementation uncertainty may actually facilitate interaction as long as behavior is observable and uncertainty is sufficiently small. We also document that reactions to norm implementation uncertainty are heterogeneous with one group of people reacting to implementation uncertainty by increasing compliance (over-compliers), while another group reacts by reducing compliance (under-compliers). The main effect of increased observability operates through the intensive margin of the under-compliers; they reduce their negative reaction to norm implementation uncertainty when their actions become more visible.