How mixing social and market norms?

This weekend, I was reading Dan Ariely's book Predictably Irrational, and one chapter in particular caught my attention, so I thought I’d share its insights with you. In this case, I'll focus on the weight of social norms, as the author clearly explains why we enjoy doing things—but not when we’re paid for them. Today, there are collaborative platforms where information flows freely in forums, but when we want the opinion of the same person as an expert, they may charge a significant fee.

One example that caught my attention is the idea of imagining that your mother-in-law prepares an extraordinary family dinner, with special dishes and personalized touches for every member of the family. Now, imagine thanking her by saying, "Dear mother-in-law, thank you for your efforts; here’s a transfer of a certain amount of money for the work you’ve done." Instead of appreciating the payment, her reaction would likely be one of great disapproval, because in our culture, such an act is considered disrespectful. It moves us from a social norm to a market norm.

The situation becomes even more interesting in the next example. The author explains an experiment conducted in a preschool where parents had issues arriving on time to drop off their children. Under social norms, parents were embarrassed when they were late, so they tried to avoid being late the next day. To test an alternative, the school implemented fines for parents who arrived late with their children. Interestingly, the result was not improved punctuality but rather an increase in late arrivals, as social norms were replaced by market norms. The parents began calculating which days they would be late based on the cost of the fines. The most surprising result came after a few weeks when the school removed the fines, and parents arriving late got even worse than before.

The author explains the delicate balance of navigating between market norms and social norms, and how today, companies often try to foster loyalty by creating a sense of family with their customers through social norms. However, if they later impose fees, like a late payment charge, it may feel like an offense, as it contradicts the “social” bond they’ve worked to build. In theory, family doesn’t penalize small lapses. Under social norms, it’s far more acceptable to “forgive” a late payment. Otherwise, the relationship shifts from a socially-based bond to a market-based one.

So, how should companies communicate effectively? Should we always speak in market terms, risking upset clients? At the end of the day, companies want and need to profit, so what are the limits of communication? Can we establish connections based on social norms?

The answer is that any norm—whether market-based or social—can work as a communication strategy, but the key is consistency. Either be clear and transparent about the market-based relationship, or be consistent with social norms, acknowledging the risks involved.

Like life itself, nothing is free; we always take certain risks. The key is determining which risks we are willing to take. If you enjoyed this article, I recommend Ariely's book—it offers great insights into customer behavior.

Have a wonderful week. ??