Who shapes our daily choices? Society, friends, family, colleagues, or neighbours? A team of economists examined how social interactions influence our decisions and what this means for public policy.
The acclaimed series The Wire, particularly its first season, portrays the clash between law enforcement and gangs in Baltimore. Beyond its realistic and nuanced storytelling, the series stands out for its complex characters, such as the determined policeman McNulty and the criminal with a passion for economics, Stringer Bell. Despite being on opposite sides of the law, both characters share sharp intelligence and adherence to their own codes of honour.
But how can two such similar individuals end up on such divergent paths? Their stories illustrate the profound impact of environment and peers on the choices we make—a reality explored by economists Yves Zenou, Vincent Boucher, Michelle Rendall, and Philip Ushchev.
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Dialogues économiques is a digital journal published by the Aix-Marseille School of Economics (AMU, CNRS, EHESS, Centrale Méditerranée). A gateway between academic research and society, Dialogues économiques provides all citizens with the keys to economic reasoning. Articles are published every two weeks.
Invisible, but omnipresent
The phrase "man is a social animal", often attributed to Aristotle, originate from the Greek term ζῷον πολιτικόν which is more accurately translated as "political animal." This idea reflects the belief that humanity’s natural state is to live in community, governed by a set of rules—some more explicit than others. Our behaviours and attitudes are shaped by a common set of norms that organise and structure life in society. These norms vary across different territories. For instance, in Switzerland, reporting a neighbour who breaks the law is a socially accepted and even encouraged act, whereas this is not the case in neighbouring countries.
Some of these norms are codified into laws that punish actions deemed harmful to society, such as criminal acts. Over the past thirty years, while crime rates in the United States have generally been declining, the population behind bars has continued to rise, making it the country with the largest prison population in the world. This phenomenon is closely tied to the "Zero tolerance" policy implemented by Rudy Giuliani during his tenure as mayor of New York City from 1993 to 20011. His approach to crime was straightforward: increased firmness, reduced time between arrest and trial, more frequent checks, and a larger police presence. The heightened risk of incarceration, he argued, would serve as a deterrent to crime.
Article originally published in Dialogues Economiques on February 19, 2025.
Reference: Boucher C., Rendall M., Ushchev P., Zenou Y., 2024, "Toward a General Theory of Peer Effects". Econometrica, 92 (2), 543-565.
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