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Morally Motivated Self-Regulation

  • David P. Baron
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    Self-regulation is the private provision of public goods and private redistribution. This paper examines the scope of self-regulation motivated by altruistic moral preferences that are reciprocal and stronger the closer are citizens in a socioeconomic distance. The focus is on the role of organizations in increasing self-regulation by mitigating free-rider problems. Social label and certification organizations can expand the scope of self-regulation but not beyond that with unconditional altruism. Enforcement organizations expand the scope of self-regulation farther, and for-profit enforcement is more aggressive than nonprofit enforcement. Enforcement through social pressure imposed by NGOs also expands the scope of self-regulation. (JEL D64, H41, L51)

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    Article provided by American Economic Association in its journal American Economic Review.

    Volume (Year): 100 (2010)
    Issue (Month): 4 (September)
    Pages: 1299-1329

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    Handle: RePEc:aea:aecrev:v:100:y:2010:i:4:p:1299-1329
    Note: DOI: 10.1257/aer.100.4.1299
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    1. David P. Baron & Daniel Diermeier, 2007. "Strategic Activism and Nonmarket Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 599-634, 09.
    2. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
    3. Tabellini, Guido, 2007. "The Scope of Cooperation: Values and incentives," CEPR Discussion Papers 6534, C.E.P.R. Discussion Papers.
    4. Lyon,Thomas P. & Maxwell,John W., 2004. "Corporate Environmentalism and Public Policy," Cambridge Books, Cambridge University Press, number 9780521603768.
    5. Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
    6. Eshel, Ilan & Samuelson, Larry & Shaked, Avner, 1998. "Altruists, Egoists, and Hooligans in a Local Interaction Model," American Economic Review, American Economic Association, vol. 88(1), pages 157-79, March.
    7. Baron, David P., 2008. "Managerial contracting and corporate social responsibility," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 268-288, February.
    8. David P. Baron, 2007. "Corporate Social Responsibility and Social Entrepreneurship," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 683-717, 09.
    9. repec:oup:qjecon:v:123:y:2008:i:3:p:905-950 is not listed on IDEAS
    10. David P. Baron, 2009. "A Positive Theory of Moral Management, Social Pressure, and Corporate Social Performance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 7-43, 03.
    11. Keser, Claudia & van Winden, Frans, 2000. " Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
    12. Maxwell, John W & Lyon, Thomas P & Hackett, Steven C, 2000. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 583-617, October.
    13. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
    14. Claudia Keser & Frans A.A.M. van Winden, 2000. "Conditional Cooperation and Voluntary Contributions to Public Goods," Tinbergen Institute Discussion Papers 00-011/1, Tinbergen Institute.
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