An extended rationality model of social norms in labour supply

A microeconomic model explaining the effects of social norms on labor supply behavior was developed based on Akerlof's theory of social custom. According to the basic short-run model, individual labor supply can be influenced by the disutility of reputation loss and cognitive dissonance resulting from the violation of social constraints. Using this extended rationality model, comparative statics of male and female labor supply were obtained for selected social norms and an additive quadratic extension of the linear utility function.