The Constitution of the Not-For-Profit Organisation: Reciprocal Conformity to Morality
We investigate the link between individual motivations and economic organisations by focusing on the case of non-profit firms. First, we provide a model of individual behaviour that allows for agents to have motivations different from self-interest. We assume that individuals desire to comply with the prescriptions of a universally recognised moral principle conditionally on the expectation of similar compliance by other agents. This principle will shape the constitution of the non-profit organisation. Second, we study a simple ‘production game’ where a ‘for-profit’ and a ‘non-profit’ equilibria both exist. In the former, self-interested considerations prevail, so that agents implement the free-market standard; conversely, in the latter, conformist preferences are dominant, so that players act in such a way that the moral principle is fulfilled. The non-profit organisation is characterised in terms of a ‘social contract’ between the founders of the firm and its stakeholders. We also point out that the structure of the ‘psychological game’ underlying the interaction is akin to a co-ordination problem, so that the possibility of co-ordination failures underscores the risk of ‘distorting’ individual dispositions in the shift from the ‘micro’ level of the individuals to the ‘macro’ level of the organisation as a whole. Copyright Springer Science+Business Media, Inc. 2005
Volume (Year): 16 (2005)
Issue (Month): 3 (09)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/political+science/journal/10602/PS2|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gary Charness & Matthew Rabin, 1999.
"Social preferences: Some simple tests and a new model,"
Economics Working Papers
441, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2000.
- Gary Charness & Matthew Rabin, 2001. "Social Preferences: Some Simple Tests and a New Model," General Economics and Teaching 0012002, EconWPA.
- Gary Charness and Matthew Rabin., 2000. "Social Preferences: Some Simple Tests and a New Model," Economics Working Papers E00-283, University of California at Berkeley.
- Charness, Gary & Rabin, Matthew, 2000. "Social Preferences: Some Simple Tests and a New Model," Department of Economics, Working Paper Series qt46j0d6hb, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Gary Charness & Matthew Rabin, 2000. "Social Preferences: Some Simple Tests and a New Model," Econometric Society World Congress 2000 Contributed Papers 1483, Econometric Society.
- Lorenzo Sacconi, 2002. "The efficiency of the non-profit enterprise: constitutional ideology, conformist preferences and reputation," LIUC Papers in Ethics, Law and Economics 110, Cattaneo University (LIUC).
- Lorenzo Sacconi, 2001. "Incomplete contracts and corporate ethics: a game theoretical model under fuzzy information," LIUC Papers in Ethics, Law and Economics 91, Cattaneo University (LIUC).
- Ernst Fehr & Klaus M. Schmidt, "undated". "Theories of Fairness and Reciprocity - Evidence and Economic Applications," IEW - Working Papers 075, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr & Klaus Schmidt, 2000. "Theories of Fairness and Reciprocity – Evidence and Economic Applications," CESifo Working Paper Series 403, CESifo Group Munich.
- Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity - Evidence and Economic Applications," CEPR Discussion Papers 2703, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:kap:copoec:v:16:y:2005:i:3:p:249-276. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.