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Prisoner’s Dilemmas, Cooperative Norms, and Codes of Business Ethics

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  • Steven Scalet

Abstract

Prisoner's dilemmas can lead rational people to interact in ways that lead to persistent inefficiencies. These dilemmas create a problem for institutional designers to solve: devise institutions that realign individual incentives to achieve collectively rational outcomes. I will argue that we do not always want to eliminate misalignments between individual incentives and efficient outcomes. Sometimes we want to preserve prisoner's dilemmas, even when we know that they systematically will lead to inefficiencies. No doubt, prisoner's dilemmas can create problems, but they also create opportunities to practice the cooperative norms that make market institutions possible in the first place. An ethical market culture, I argue, benefits from the presence of prisoner's dilemmas. I first consider standard approaches for solving prisoner's dilemmas. I then argue for the value of prisoner's dilemmas. Finally, I show the significance of this argument for advocating codes of business ethics. Copyright Springer 2006

Suggested Citation

  • Steven Scalet, 2006. "Prisoner’s Dilemmas, Cooperative Norms, and Codes of Business Ethics," Journal of Business Ethics, Springer, vol. 65(4), pages 309-323, June.
    • Handle: RePEc:kap:jbuset:v:65:y:2006:i:4:p:309-323
    DOI: 10.1007/s10551-005-5356-x
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    Citations

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    Cited by:

    1. Yuri Gorbaneff & Elsa Margarita Uribe & Guillermo Hoyos, 2012. "Los códigos de conducta de las empresas petroleras en Colombia: Una caracterización," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 14(27), pages 193-205, July-Dece.
    2. Simon Cornée & Madeg Le Guernic & Damien Rousselière, 2020. "Governing Common-Property Assets: Theory and Evidence from Agriculture," Journal of Business Ethics, Springer, vol. 166(4), pages 691-710, November.
    3. Laura Gomez-Ruiz & María J. Sánchez-Expósito, 2020. "The Impact of Team Identity and Gender on Free-Riding Responses to Fear and Cooperation Sustainability," Sustainability, MDPI, vol. 12(19), pages 1-21, October.
    4. Pedro FrancŽs-G—mez & Lorenzo Sacconi & Marco Faillo, 2012. "Behavioral Business Ethics as a Method for Normative Business Ethics," Econometica Working Papers wp42, Econometica.

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