Oblique Complementarities, Social Norms and the Signaling Value of Parental Behavior

This paper studies social learning in parent-child relationships; children look at their parents' behavior to form beliefs about the prevalent norm within society. We characterize how signaling concerns distort the parents' actions in the unique equilibrium. This depends on the strength of what we call `oblique complementarities', measuring the children's gain from adopting the `right' behavior in the face of the dominant norm. In our setup, the very act of signaling changes the nature of what is being signaled. Parents who follow a norm to signal that it is the dominant norm make the norm even more pervasive, and signaling more compelling. As a result of signaling concerns, parents may behave as if their actions were strategic complements, even when in fact they are substitutes. We discuss applications to sexual attitudes, cultural identity, work ethic, and pro-social values.