Economics and Social Interaction

Economics and Social Interaction is a fresh attempt to overcome the traditional inability of economics to deal with interpersonal phenomena that occur within the sphere of markets and productive organisations. It makes use of traditional economic concepts for understanding interpersonal events, while venturing beyond those concepts to give a better account of personalised interactions. In contrast to other books, Economics and Social Interaction offers the reader a rigorous effort at extending economic analysis to a notoriously slippery field in a consistent manner, sensitive to insights from other behavioural and social sciences. This collection represents an important contribution to a growing research agenda in the social sciences.

Benedetto Gui is Professor of Economics at the Università di Padova, Italy.

Robert Sugden is Professor of Economics at the University of East Anglia, Norwich.

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Economics and Social Interaction

Accounting for Interpersonal Relations

Edited By

Benedetto Gui and Robert Sugden

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CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo

Cambridge University Press
The Edinburgh Building, Cambridge, CB2 2RU, UK

Published in the United States of America by Cambridge University Press,
New York

www.cambridge.org

Information on this title: www.cambridge.org/9780521848848

© Cambridge University Press 2005

This book is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without
the written permission of Cambridge University Press.

First published 2005

Printed in the United Kingdom at the University Press, Cambridge

A catalogue record for this book is available from the British Library

Library of Congress cataloguing in publication data

ISBN-13 978-0-521-84884-8 hardback
ISBN-10-0-521-84884-9 hardback

Cambridge University Press has no responsibility for the persistence or accuracy
of URLs for external or third-party internet websites referred to in this book,
and does not guarantee that any content on such websites is, or will remain,
accurate or appropriate.

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Dedication

To our wives, Marina and Christine, who tolerantly accept the discrepancies between righteous theorising about social interaction and its domestic practice.

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Contents

List of illustrations		page ix
Notes on contributors		x
Preface		xiv
1	Why interpersonal relations matter for economics BENEDETTO GUI AND ROBERT SUGDEN	1
2	From transactions to encounters: the joint generation of relational goods and conventional values BENEDETTO GUI	23
3	Fellow-feeling ROBERT SUGDEN	52
4	Interpersonal interaction and economic theory: the case of public goods NICHOLAS BARDSLEY	76
5	Under trusting eyes: the responsive nature of trust VITTORIO PELLIGRA	105
6	Interpersonal relations and job satisfaction: some empirical results in social and community care services CARLO BORZAGA AND SARA DEPEDRI	125
7	On the possible conflict between economic growth and social development ANGELO ANTOCI, PIER LUIGI SACCO AND PAOLO VANIN	150
8	The logic of good social relations SERGE-CHRISTOPHE KOLM	174
9	The mutual validation of ends SHAUN HARGREAVES HEAP	190
10	Hic sunt leones: interpersonal relations as unexplored territory in the tradition of economics LUIGINO BRUNI	206
11	Authority and power in economic and sociological approaches to interpersonal relations: from interactions to embeddedness BERNARD GAZIER AND ISABELLE THIS SAINT-JEAN	229
12	Interpersonal relations and economics: comments from a feminist perspective JULIE A. NELSON	250
13	Economics and interpersonal relations: ruling the social back in LOUIS PUTTERMAN	262
Envoi		270
References		271
Index		295

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Illustrations

Figures

2.1	The encounter as a productive process	page 44
5.1	Two games	107
6.1	Preferences for wages and relational goods	128
7.1	A graphic representation of cases (a) and (b) of proposition 4	161

Tables

6.1	Main characteristics of organisations (percentage values)	129
6.2	Main characteristics of employees (percentage values)	130
6.3	Attitudes to work (average scores)	131
6.4	The importance of working activity in commencing new relationships (average scores)	132
6.5	Areas of satisfaction (average scores)	133
6.6	Workers' satisfaction by individual and organisational characteristics	135
6.7	Satisfaction with the job as a whole (ordered probit)	136
6.8	Satisfaction with relational aspects of the job, by wage level (average scores)	138
6.9	Satisfaction with relational aspects of the job (ordered probit)	139
6.10	Satisfaction with relational aspects, by type of organisation (average scores)	140
6.11	Future intentions of workers	141
6.12	Loyalty to the organisation with regard to attitudes (logit estimation)	142
6.13	Loyalty to the organisation with regards to satisfaction (logit estimation)	144
6.14	Willingness to quit, by the level of satisfaction with wages and relations (percentage values)	147
6.15	Intentions to stay with the organisation and satisfaction with wages and relations (percentage values)	147

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Notes on Contributors

ANGELO ANTOCI holds a Ph.D. in political economy from the University of Siena, Italy (1993), and is currently Associate Professor of Mathematics for Economic Decision Making at the University of Sassari, Italy. His main research interests are economic growth, environmental economics, evolutionary game theory and its applications. He has published in international journals on partnership formation, corruption in public contracting in an evolutionary framework, and the dynamics of cooperative strategies.

NICHOLAS BARDSLEY is a research fellow at the School of Economics in the University of Nottingham. His fields of interest comprise experimental economics, methodology, and philosophy of economics. He currently researches artificiality arguments against experimental economics and is conducting a meta-analysis of preference reversal experiments. His most recent publication is, with Robert Sugden, ‘Human nature and sociality’, in The Handbook of the Economics of Gift-Giving, Altruism and Reciprocity (forthcoming).

CARLO BORZAGA is Professor of Economic Policy and Director of ISSAN (Institute for the Development of Non-profit Organisations) at the University of Trento, Italy. He has published extensively – in Italian, English and French – theoretical and empirical research on the economics of labour, welfare services, and non-profit organisations. He has recently edited The Emergence of Social Enterprises (2001), with Jacques Defourny, and Capitale umano e qualità del lavoro nei servizi sociali: un'analisi comparata tra modelli di gestione (2000).

LUIGINO BRUNI is Assistant Professor of Economics at the University of Milano Bicocca. His principal fields of interest are the history of economic thought, the ethical and anthropological foundations of economic discourse, and social and non-profit economy. His publications include several articles in international journals, chapters of edited volumes, and several books. Among these are Vilfredo Pareto and the Birth of the Modern Microeconomics (2002) and Economics and the Paradoxes of Happiness (edited with Pier Luigi Porta, 2004).