Nudity, Law, and Social Norms

31 May 2006 at 12:44 pm 9 comments

| Peter Klein |

From Bryan Caplan I learn that Berkeley's "Naked Guy," a campus fixture during my graduate-school years there in the early 1990s, committed suicide last week. Bryan, then a Berkeley undergraduate, adds this astute observation: "At the time, I often pointed out that the Naked Guy was proof that social norms, not the law, were the foundation of civility: Even if nudity were legalized, only one student out of tens of thousands would take it all off."

The importance of informal norms and social conventions is increasingly recognized in economics (and law). The literature in this area goes back at least to Menger's (1883) analysis of institutions, and includes contributions from Schelling (1960), Ullman-Margalit (1977), Schotter (1981), Sugden (1986), Benson (1990), and Ellickson (1991). Recent work by Baker, Gibbons, and Murphy (2002) on relational contracting, focusing on the narrower question of firm boundaries, belongs on this list as well. This literature interprets social norms as equilibrium solutions to the kinds of coordination games popularized by Schelling (1960). Credible threats of reciprocity are the key. In these models agents abide by informal rules not out of a sense of moral duty, or from a process of unconscious socialization, but because it is in their rational self-interest to do so.

My sense is that management theory, and organizational behavior in particular, has yet to grapple with the insights from this strand of literature. Am I wrong?

Entry filed under: - Klein -, Ephemera, Institutions. Tags: .

Axel Leijonhufvud and a Bit of Autobiography Technological Change: The Human Cost

9 Comments Add your own

  • 1. brayden  |  1 June 2006 at 12:10 am

    I think you’re correct that management theory hasn’t addressed norm emergence, but there is a thriving literature in sociology that deals explicitly with it. Michael Hechter, Karen Cook, and Linda Molm are social psychologists who have spent a lot of time thinking about and researching how exchange relations produce norms of reciprocity and trust. Christine Horne’s research examines how rational choice in exchange relations leads to the production and enforcement of norms. You should check out some of the work that she’s done.

    Her 2004 Social Forces piece is an experimental test of the hypothesis that individuals will be more likely to enforce norms that allow individuals to engage in profitable exchange. When interdependence between exchanging actors is high, the likelihood of norm enforcement is even greater.

  • 2. Nicolai Foss  |  1 June 2006 at 2:52 am

    Peter, There are many references in the management literature to game theory work on conventions and norms. Most muzzy management types just consider it too primitive (there is some justification to this view).

    BTW, you should distinguish between the “kind of coordination games popularized by Schelling” and PD-games. The latter are by far the more important kind of game when it comes to explaining norms. That being said there is some management work that uses coordination game ideas, e.g., by Camerer and Knez (ICC, 1996) and by yours truly (ICC, 2001).

    Brayden, Why do you call Hechter and Cook “social psychologists”? Aren’t they sociologists?

  • 3. Bart Doorneweert  |  1 June 2006 at 6:54 am

    The mystery of compensation of executives was cracked with norms by Herbert Simon in 1957 (Sociometry, Vol. 20, No. 1). Norms are getting there, slowly, but surely.
    Btw did you know that the new finance secretary in the US gave up 95% of his previous salary to take up his new job? He now makes $200.000/annum. How nude is that?

  • 4. Bart Doorneweert  |  1 June 2006 at 7:00 am

    Wups! I missed a digit somewhere in that calculation; it’s 99.5% of his previous salary…

  • 5. Peter Klein  |  1 June 2006 at 9:26 am

    Thanks to all for the readings suggestions. I knew a post with “nudity” in the title would get people’s attention. :-)

    And of course Nicolai is right that both PD and coordination games are important. I should have been more precise.

  • 6. brayden  |  1 June 2006 at 9:37 am

    Nicolai – We have lots of distinctions among sociologists. One of the divisions is between macro-people like myself and the more micro-oriented folks who call themselves social psychologists. Hechter is probably better thought of as a theorist, but Cook is a social psychologist. Molm, who professes in the sociology department at my alma mater, is also a self-labeled social psychologist.

  • 7. » Blog Archive » more enron talk  |  1 June 2006 at 1:49 pm

    [...] With all of this talk about the Enron, I'm surprised I don't hear more people saying that they agree with the verdict (there seems to be near unanimity at Conglomerate that the jury was technically wrong in their verdict). I guess this just demonstrates how powerful norms are in deciding how the law is interpreted in the courtroom. [...]

  • 8. Nicolai Foss  |  2 June 2006 at 2:58 am

    Brayden, I may be dense, and I am certainly very ignorant about sociology (as you know ;-)), but I am very confused now. I would never think of, say, Edward Deci as a sociologist, but he most certainly is a social psychologist. Are there SPs who are not Ss? If so, what is the criterion for including a specific SP in the S set?

  • 9. brayden  |  2 June 2006 at 11:18 pm

    Yes, there are sociologist social psychologists and psychologist social psychologists. The subdisciplines overlap somewhat, but they are fairly different in their theoretical orientation. I wish I could give you more detail, but alas, I never even took a sociology social psychology course during grad school.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Nicolai J. Foss | home | posts
Peter G. Klein | home | posts
Richard Langlois | home | posts
Lasse B. Lien | home | posts


Former Guests | posts


Recent Posts



Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).


Get every new post delivered to your Inbox.

Join 241 other followers