More Order Without More Law: A Theory of Social Norms and Organizational Cultures

This article applies psychological game theory to study the maintenance of social order. It models the control of corruption in principal-supervisor-agent relationships. The models possess multiple equilibria, which correspond to certain social norms and organizational cultures or their absence. The models demonstrate how expectations concerning the likelihood of corrupt behavior can influence decisions to engage in such behavior via the magnitude of endogenous remorse on the part of the actor. Copyright 1994 by Oxford University Press.

[1]  D. Collard,et al.  Trust : making and breaking cooperative relations , 1989 .

[2]  K. Hwang.  Face and Favor: The Chinese Power Game , 1987, American Journal of Sociology.

[3]  J. Tirole.  Hierarchies and Bureaucracies: On the Role of Collusion in Organizations , 1986 .

[4]  A. Greif.  Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies , 1994, Journal of Political Economy.

[5]  P. H. Huang,et al.  EMOTIONAL RESPONSES IN LITIGATION , 1992 .

[6]  O. Williamson.  Calculativeness, Trust, and Economic Organization , 1993, The Journal of Law and Economics.

[7]  Stewart Macaulay.  Non-contractual relations in business: a preliminary study , 1963 .

[8]  W. Gaertner,et al.  Cheating the Government: The Economics of Evasion. , 1992 .

[9]  D. Baird,et al.  Game theory and the law , 1994 .

[10]  Richard J. Zeckhauser,et al.  Strategy and Choice. , 1992 .

[11]  A. Tversky,et al.  The framing of decisions and the psychology of choice. , 1981, Science.

[12]  R. Ames.  The Art of Rulership: A Study of Ancient Chinese Political Thought , 1983 .

[13]  J. Baldry.  Tax evasion is not a gamble: A report on two experiments , 1986 .

[14]  Robert C. Ellickson.  Bringing Culture and Human Frailty to Rational Actors: A Critique of Classical Law and Economics , 1989 .

[15]  Richard Craswell.  On the Uses of "Trust": Comment on Williamson, "Calculativeness, Trust, and Economic Organization" , 1993, The Journal of Law and Economics.

[16]  James P. P. Gordon,et al.  Individual morality and reputation costs as deterrents to tax evasion , 1989 .

[17]  J. Hirshleifer.  The Affections and the Passions , 1993 .

[18]  K. Shepsle,et al.  Perspectives on Positive Political Economy: REFLECTIONS ON THEORETICAL FOUNDATIONS , 1990 .

[19]  P. Dasgupta.  Trust as a commodity , 1988 .

[20]  J. Geanakoplos,et al.  Psychological games and sequential rationality , 1989 .

[21]  D. Pyle.  Tax evasion and the black economy , 1989 .

[22]  Robert C. Ellickson.  Of Coase and Cattle: Dispute Resolution Among Neighbors in Shasta County , 1986 .

[23]  J Neuberger,et al.  Fear and loathing. , 1986, Nursing times.

[24]  J. Hirshleifer.  On the Emotions as Guarantors of Threats and Promises , 1984 .

[25]  Robert C. Ellickson.  Order without law : how neighbors settle disputes , 2009 .

[26]  Diego Gambetta.  Trust : making and breaking cooperative relations , 1992 .

[27]  E. Hoffman,et al.  Fear and Loathing in the Coase Theorem: Experimental Tests Involving Physical Discomfort , 1987, The Journal of Legal Studies.

[28]  R. Frank,et al.  The Strategic Role of the Emotions , 1993 .

[29]  R. Frank.  Passions Within Reason: The Strategic Role of the Emotions , 1990 .

[30]  S. Rose-Ackerman.  Corruption: A study in political economy , 1978 .

[31]  Robert C. Ellickson.  A Hypothesis of Wealth-Maximizing Norms: Evidence from the Whaling Industry , 1989 .

[32]  G. Stigler,et al.  Law Enforcement, Malfeasance, and Compensation of Enforcers , 1974, The Journal of Legal Studies.

[33]  Michael J. Graetz,et al.  The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement , 1986 .

[34]  David M. Kreps,et al.  Rational cooperation in the finitely repeated prisoners' dilemma , 1982 .

[35]  Jennifer F. Reinganum,et al.  The Economics of Income Taxation: Compliance in a Principal-Agent Framework , 1983 .

[36]  J. Elster.  Social Norms and Economic Theory , 1989, Handbook of Monetary Policy.

[37]  David M. Kreps.  Corporate culture and economic theory , 1990 .