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

The Constitution of the Not - For - Profit Organisation: Reciprocal Conformity to Morality / Sacconi, Lorenzo; G., Grimalda. - In: CONSTITUTIONAL POLITICAL ECONOMY. - ISSN 1043-4062. - STAMPA. - 16:3(2005), pp. 249-276. [http://www.springerlink.com/content/777q328557252588/?p=f8d1b75db548425f84b1b648d60f9f6e&pi=7]

The Constitution of the Not - For - Profit Organisation: Reciprocal Conformity to Morality

Sacconi, Lorenzo;
2005-01-01

Abstract

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
2005
3
Sacconi, Lorenzo; G., Grimalda
The Constitution of the Not - For - Profit Organisation: Reciprocal Conformity to Morality / Sacconi, Lorenzo; G., Grimalda. - In: CONSTITUTIONAL POLITICAL ECONOMY. - ISSN 1043-4062. - STAMPA. - 16:3(2005), pp. 249-276. [http://www.springerlink.com/content/777q328557252588/?p=f8d1b75db548425f84b1b648d60f9f6e&pi=7]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11572/69916
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