Peer pressure and inequity aversion in the Japanese firm

Gianandrea Staffiero ()
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Gianandrea Staffiero: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

No D/645, IESE Research Papers from IESE Business School

Abstract: We present an explanation of the high frequency of team production and high level of peer monitoring found in Japanese firms, in terms of a simple and empirically grounded variation in individual utility functions. We argue that Japanese agents are generally characterized by a higher degree, with respect to their Western counterparts, of aversion to unfavorable inequality, a feature which explains seemingly puzzling experimental evidence. In combination with long term employment and various organizational practices, this creates the conditions for obtaining willingness to exert mutual monitoring and peer pressure which facilitates the convergence towards cooperative equilibria in dilemma type situations.

Keywords: Team Production; Fairness; Cooperation; Punishment; Reciprocity (search for similar items in EconPapers)
JEL-codes: C91 C92 D63 H41 L23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-09-05
New Economics Papers: this item is included in nep-sea, nep-soc and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0645

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