For most of the twentieth century, economists treated social norms as exogenous constraints on rational behavior — background rules that shaped the environment in which self-interested agents maximized utility, but that were not themselves objects of economic explanation. This view began to erode in the 1980s, when theorists noticed that norms governing cooperation, punishment, and reciprocity could not be easily reduced to self-interest narrowly conceived. If individuals were purely self-interested, why would a stranger incur a cost to punish someone who violated a fairness norm in a one-shot interaction that would never be repeated?

Behavioral economists responded to this puzzle by expanding the utility function to include social preferences — preferences for fairness, reciprocity, and the welfare of others. On this account, norms are not merely external constraints; they are partially internalized, shaping what people want, not just what they can do. Experimental evidence from ultimatum games and public-goods experiments consistently showed that people reject unfair offers and contribute to public goods even when it is individually costly, behavior that standard models struggled to explain.

Critics from sociology argued that even behavioral economics remained too methodologically individualist. Norms, they contended, are irreducibly social phenomena that must be studied at the level of groups, institutions, and cultural practices, not decomposed into individual utility functions. A norm against littering, for instance, derives its force not from any single person's internalized preference but from shared expectations about what others will do and how violations will be treated — a structure that cannot be captured by summing individual preferences.

The debate remains unresolved. Behavioral economists have developed increasingly sophisticated models of social preferences, while sociologists have refined the concept of norm salience to predict when group-level dynamics will override individual calculations. Neither camp has produced a fully satisfying account of why some norms persist across centuries while others collapse overnight.