Bargaining and Influence in Conflict Situations

[Excerpt] This chapter examines bargaining as an influence process through which actors attempt to resolve a social conflict. Conflict occurs when two or more interdependent actors have incompatible preferences and perceive or anticipate resistance from each other (Blalock 1989; Kriesberg 1982). Bargaining is a basic form of goal-directed action that involves both intentions to influence and efforts by each actor to carry out these intentions. Tactics are verbal and/or nonverbal actions designed to maneuver oneself into a favorable position vis-a-vis another or to reach some accommodation. Our treatment of bargaining subsumes the concept of negotiation (see Morley and Stephenson 1977). This chapter is organized around a conceptual framework that distinguishes basic types of bargaining contexts. We begin by introducing the framework and then present an overview of and analyze theoretical and empirical work on each type of bargaining context

Trust, Reciprocity and Institutional Design: Lessons from Behavioural Economics

Trust and reciprocity are the bond of society (Locke), but economic agents are both self-interested and intrinsically untrustworthy. These assumptions impair severely economists' accounts of social relationships. The paper examines strategies to escape this paradox by enlarging our conception of rationality: the assumptions of self-interest and consequentialism are critically discussed as well as relational behavioural principles (e.g. trust and reciprocity). The implications of this enlarged kind of rationality are particularly important for agency theory. The paper analyses, within this framework, the working of two different kinds of incentive mechanisms, namely intra-personal and interpersonal, and discusses experimental results that emphasise the empirical relevance of the latter. Besides providing a more descriptively adequate picture of agency, such mechanisms have important normative implications. In this respect some of the conditions that affect the process of accumulation and erosion of trust and social capital are explored. The tension between rules and trust turns out to be not inescapable, though it calls for a changing in the designing logic of institutions and contracts. I shall discuss what are the changes needed in order to implement a trust-enhancing activity of institutional design.Incentives; reciprocity; trust; crowding-out; institutional design

The origins of fair play

This paper gives a brief overview of an evolutionary theory of fairness. The ideas are fleshed out in Binmore's book 'Natural Justice' (Oxford University Press, New York, 2005.), which is itself a condensed version of his earlier two-volume book 'Game Theory and the Social Contract' (MIT Press, Cambridge, MA, 1994 and 1998)

Trust, Reciprocity, and Guanxi in China: An Experimental Investigation

We examine the influence of social distance on levels of trust and reciprocity in China. Social distance, reflected in the indigenous concept of guanxi, is of central importance to Chinese culture. In Study 1, some participants participated in two financially salient trust games to measure behavior, one with an anonymous classmate and the other with an anonymous, demographically identical nonclassmate. Other participants, drawn from the same population, completed hypothetical surveys to gauge both hypothetical behavior and expectations of others. Social distance effects on actual and hypothetical behavior were statistically consistent. The results together corroborated the hypothesized negative relationship between trust and social distance. However, reciprocity was not responsive to social distance. Study 2 found that affect-based trust, but not cognition-based trust, played a mediating role in the relationship between social distance and interpersonal trust in a hypothetical scenario. We conclude that close guanxi ties in China engender affect-based trust, which is extended to shouren classmates. This is true despite the fact that no more cognition-based trust is placed nor reciprocity received or expected from classmates compared to demographically identical shengren nonclassmates.Experiment; Affect-based Trust; China; Guanxi; Reciprocity; Trust; Social Distance

Social Capital

This paper surveys research on social capital. We explore the concepts that motivate the social capital literature, efforts to formally model social capital using economic theory, the econometrics of social capital, and empirical studies of the role of social capital in various socioeconomic outcomes. While our focus is primarily on the place of social capital in economics, we do consider its broader social science context. We argue that while the social capital literature has produced many insights, a number of conceptual and statistical problems exist with the current use of social capital by social scientists. We propose some ways to strengthen the social capital literature.development, growth, identification, inequality, networks, social capital, trust,

Social Capital

This paper surveys research on social capital. We explore the concepts that motivate the social capital literature, efforts to formally model social capital using economic theory, the econometrics of social capital, and empirical studies of the role of social capital in various socioeconomic outcomes. While our focus is primarily on the place of social capital in economics, we do consider its broader social science context. We argue that while the social capital literature has produced many insights, a number of conceptual and statistical problems exist with the current use of social capital by social scientists.We propose some ways to strengthen the social capital literature.development, growth, identification, inequality, networks, social capital, trust

Social Capital

This paper surveys research on social capital. We explore the concepts that motivate the social capital literature, efforts to formally model social capital using economic theory, the econometrics of social capital, and empirical studies of the role of social capital in various socioeconomic outcomes. While our focus is primarily on the place of social capital in economics, we do consider its broader social science context. We argue that while the social capital literature has produced many insights, a number of conceptual and statistical problems exist with the current use of social capital by social scientists. We propose some ways to strengthen the social capital literature.

Conflicted Minds: Recalibrational Emotions Following Trust-based Interaction.

Consistent with a modular view of the mind, both short-sighted and long-sighted programs may be simultaneously active in the mind and in conflict with one another when individuals face choice dilemmas in trust-based economic interactions. Recalibrational theory helps us identify the adaptive design features shared among subsets of superordinate emotion programs. According to this design logic and the computation of adaptive problem features produced by Trust games, we predict the activation of emotions after Trust games. While this study successfully predicts reports of twenty distinct emotional states, further studies are needed to demonstrate ultimate recalibrational functions of emotions.emotions, recalibrational theory, modularity, Trust game, experiments

Trust among Strangers

The trust building process is basic to social science. We investigate it in a laboratory setting using a novel multi-stage trust game where social gains are achieved if players trust each other in each stage. And in each stage, players have an opportunity to appropriate these gains or be trustworthy by sharing them. Players are strangers because they do not know the identity of others and they will not play them again in the future. Thus there is no prospect of future interaction to induce trusting behavior. So, we study the trust building process where there is little scope for social relations and networks. Standard game theory, which assumes all players are opportunistic, untrustworthy, and should have zero trust for others is used to construct a null hypothesis. We test whether people are trusting or trustworthy and examine how inferring the intentions of those who trust affects trustworthiness. We also investigate the effect of stake on trust, and study the evolution of trust. Results show subjects exhibit some degree of trusting behavior though a majority of them are not trustworthy and claim the entire social gain. Players are more reluctant to trust in later stages than in earlier ones and are more trustworthy if they are certain of the trustee’s intention. Surprisingly, subjects are more trusting and trustworthy when the stake size increases. Finally, we find the sub- population who invests in initiating the trust building process modifies its trusting behavior based on the relative fitness of trust.Experimental Economics, Behavioral Economics

Does Monitoring Decrease Work Effort? The Complementarity Between Agency and Crowding-Out Theories

Agency theory assumes that tighter monitoring by the principal should motivate the agent to raise his effort level. In contrast, the “crowding-out” literature suggests that tighter monitoring may reduce the overall work effort. These two assertions are not necessarily contradictory provided that the nature of the employment relationship is taken into account (Frey 1993). This paper reports on the results of a real-effort laboratory experiment designed to test the relative importance of the disciplining effect and the crowding-out effect of monitoring. We find no strong support for the crowding-out hypothesis and we show that the disciplining effect of monitoring dominates in abstract one-shot relationships as well as in somewhat more interpersonal multi-shot relationships. Principals are not trustful enough to refrain from using the monitoring opportunity and most agents react to a decrease in the monitoring intensity by decreasing their effort.