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The Erosion and Sustainability of Norms and Morale

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  • Michihiro Kandori

Abstract

The initially high performance of a socioeconomic organization is quite often subject to gradual erosion over time. We present a simple model which captures such a phenomenon. We assume that players are partly motivated by certain psychological factors, norms and morale, and they are willing to exert extra effort if others do so. This results in a "continuum" of equilibrium effort levels, whose minimum corresponds to the Nash equilibrium with respect to the material incentives. We show that repeated random shocks induce the erosion of equilibrium e ort levels, but they do not completely decay; in the long run a certain range of efforts are sustainable. Our model shows that different organizations typically enjoy diverse norms and morale, which persist for a long time, in the vicinity of the equilibrium determined by material incentives.
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  • Michihiro Kandori, 2002. "The Erosion and Sustainability of Norms and Morale," Levine's Working Paper Archive 506439000000000030, David K. Levine.
    • Handle: RePEc:cla:levarc:506439000000000030
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    1. repec:bla:reviec:v:17:y:2009:i:si:p:327-337 is not listed on IDEAS
    2. Hitoshi Matsushima, 2002. "Honesty-Proof Implementation," CIRJE F-Series CIRJE-F-178, CIRJE, Faculty of Economics, University of Tokyo.
    3. Sandner, Kai, 2008. "Balancing Performance Measures When Agents Behave Competitively in an Environment With Technological Interdependencies," Discussion Papers in Business Administration 2113, University of Munich, Munich School of Management.
    4. Cartwright, Edward, 2009. "Social norms: Does it matter whether agents are rational or boundedly rational?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 403-410, June.
    5. Charles Figuières & David Masclet & Marc Willinger, 2013. "Weak Moral Motivation Leads to the Decline of Voluntary Contributions," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 15(5), pages 745-772, October.
    6. Martin G. Kocher & Peter Martinsson & Kristian Ove R. Myrseth & Conny E. Wollbrant, 2017. "Strong, bold, and kind: self-control and cooperation in social dilemmas," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 44-69, March.
    7. Tan, Jonathan H.W. & Breitmoser, Yves & Bolle, Friedel, 2015. "Voluntary contributions by consent or dissent," Games and Economic Behavior, Elsevier, vol. 92(C), pages 106-121.
    8. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 2003. "Social Norms and Welfare State Dynamics," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 533-542, 04/05.
    9. Jakub Steiner, 2006. "Strong Enforcement by a Weak Authority," Edinburgh School of Economics Discussion Paper Series 149, Edinburgh School of Economics, University of Edinburgh.
    10. Teraji, Shinji, 2007. "Morale and the evolution of norms," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(1), pages 48-57, February.
    11. Shunji Oniki & Haftu Etsay & Melaku Berhe & Teklay Negash, 2020. "Improving Cooperation among Farmers for Communal Land Conservation in Ethiopia: A Public Goods Experiment," Sustainability, MDPI, vol. 12(21), pages 1-16, November.

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