Peer pressure and inequity aversion in the Japanese firm

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Peer pressure and inequity aversion in the Japanese firm

Author Info

Staffiero, Gianandrea () (IESE Business School)

Abstract

We present an explanation of the high frequency of team production and high level of peer monitoring found in Japanese firms, in terms of a simple and empirically grounded variation in individual utility functions. We argue that Japanese agents are generally characterized by a higher degree, with respect to their Western counterparts, of aversion to unfavorable inequality, a feature which explains seemingly puzzling experimental evidence. In combination with long term employment and various organizational practices, this creates the conditions for obtaining willingness to exert mutual monitoring and peer pressure which facilitates the convergence towards cooperative equilibria in dilemma type situations.

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Paper provided by IESE Business School in its series IESE Research Papers with number D/645.

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Length: 26 pages
Date of creation: 05 Sep 2006
Date of revision:
Handle: RePEc:ebg:iesewp:d-0645

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Postal: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN
Web page: http://www.iese.edu/
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Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-10-28 (All new papers)
NEP-SEA-2006-10-28 (South East Asia)
NEP-SOC-2006-10-28 (Social Norms & Social Capital)
NEP-UPT-2006-10-28 (Utility Models & Prospect Theory)

References listed on IDEAS
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Cason, Timothy N. & Saijo, Tatsuyoshi & Yamato, Takehiko & Yokotani, Konomu, 2004. "Non-excludable public good experiments," Games and Economic Behavior, Elsevier, vol. 49(1), pages 81-102, October. [Downloadable!] (restricted)
Other versions:
- Tatsuyoshi Saijo, 2003. "Non-Excludable Public Good Experiments," Theory workshop papers 505798000000000027, UCLA Department of Economics. [Downloadable!]
- Saijo, Tatsuyoshi & Yamato, Takehiko & Yokotani, Konomu & Cason, Timothy N., 2002. "Non-Excludable Public Good Experiments," Working Papers 1154, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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Other versions:
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Other versions:
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Other versions:
- Martin Sefton & Robert S. Shupp & James Walker, 2005. "The Effect of Rewards and Sanctions in Provision of Public Goods," Working Papers 200504, Ball State University, Department of Economics, revised Feb 2005. [Downloadable!]
- Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October. [Downloadable!] (restricted)
Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August. [Downloadable!] (restricted)
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Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December. [Downloadable!] (restricted)

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