ILROB 1220 Notes- Norms and Roles in Orgs BB Bowles

ILROB 1220 Notes- Norms and Roles in Orgs BB Bowles - OB:...

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OB: Bowles and Gintis Notes: Social Preferences Intro - Homo economicus : constrained view of how humans act based on social preferences - Three assumptions: o Preferences are assumed to be outcome regarding: people care aonly abou the quanityt and quality of the good received o Preferences are assumed to be self-regarding: people care only about states experienced by themselves o Preferences are assumed to be unchanging - In reality: o Preferences are process regarding: people care how they are treated and how they treat others o Preferences are other-regarding: people care about well-being of others o Preferences can often change due to changes externally and internally - In particular, people reward and punish behavior of others at net cost to themselves - Strong reciprocity: predisposition to cooperate with others, and to punish those who violate the norms of cooperation at personal cost - Fact that an action is other regarding does NOT make it irrational or even non-rational Experiment 1: Strong Reciprocity in the Labor Market - Experiment: o Employer offers contract specifying wage(1-100) and required effort (1-10) to pool of workers o As soon as one employee accepts contract it is set o Employee then receives wage, and then has to put forth effort they choose
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This note was uploaded on 12/13/2010 for the course ILROB 1220 taught by Professor Goncaloj during the Fall '07 term at Cornell University (Engineering School).

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ILROB 1220 Notes- Norms and Roles in Orgs BB Bowles - OB:...

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