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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
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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