Handbook on the Economics of Happiness
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Handbook on the Economics of Happiness

Edited by Luigino Bruni and Pier Luigi Porta

This book is a welcome consolidation and extension of the recent expanding debates on happiness and economics. Happiness and economics, as a new field for research, is now of pivotal interest particularly to welfare economists and psychologists. This Handbook provides an unprecedented forum for discussion of the economic issues relating to happiness. It reviews the more recent literature and offers the interested reader an insight into the vast scope of the field in terms of the theory, its applications and also experimental design. The Handbook also gives substantial indications as to the future direction of research in the field, with particular regard to policy applications and developing an economics of interpersonal relations which includes reciprocity and social interaction theory.
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Chapter 24: Ideals, Conformism and Reciprocity: A Model of Individual Choice with Conformist Motivations, and an Application to the Not-for-Profit Case

Lorenzo Sacconi and Gianluca Grimalda


24 Ideals, conformism and reciprocity: a model of individual choice with conformist motivations, and an application to the not-for-profit case Lorenzo Sacconi and Gianluca Grimalda* 1. Introduction Studies dealing with the economic and social function of the nonprofit enterprise can be traced back to two major strands of literature. The first emphasizes peculiar failures – mainly median voter and asymmetry of information – of both political and market systems in providing public or welfare goods (respectively, Weisbrod 1988; Hansmann 1980), thus arguing for the necessity of new organizational forms of production in those sectors. However, these models do not actually explain what in the peculiar institutional nature of a nonprofit should help to solve this kind of inefficiency. The second approach does offer a ‘positive’ explanation for the nonprofit firm, which draws on the idea that agents involved in the nonprofit sector are ideologues – that is, they have other-regarding motivations such as altruism, are ready to conform to an established system of norms, and are disposed to reciprocate the perceived fairness of others’ action (for a review, see Rose-Ackermann 1987). However, in our view this approach does not provide a sound theoretical foundation for these attitudes, which risks making the whole explanation void. Moreover, such a theory is at odds with evidence on extensive conflicts of interests that also affect the agents involved in the nonprofit activity, as highlighted by the frequent practice of self-imposing norms involving fiduciary duties and codes of...

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