Benedetto Gui

Beyond Transactions: On the Interpersonal Dimension of Economic Reality

The paper investigates the interpersonal dimension of economic reality i.e. the reciprocal influences between interpersonal phenomena of a communicativeaffective nature and usual economic phenomena. A face-to-face interaction, or encounter, is depicted as a special productive process in which agents-besides exchanging ordinary goods or delivering services, create and simultaneously consume relational goods. Inputs include relational assets - e.g. relation-specific information, or the social climate of a workshop, which in turn are affected by encounters. Consideration of relational goods and assets broadens the economists perspective in several directions.

The Theory of Nonprofit Organizations Revisited

Much has been written during the last two decades about the theory of nonprofit organizations (NPOs). Researchers, policy makers, and practitioners in NPOs have repeatedly asked themselves variants of the following set of questions: n n n• What do NPOs do that for-profit firms (FPFs) and government agencies are not doing already? n n n• Do NPOs operate as efficiently as their for-profit counterparts? n n n• Do NPOs serve the same broad groups as government units do? n n n• Should NPOs receive special tax treatment?

Team Human Capital and Worker Mobility

We discuss the concept of “team human capital” and study the renegotiation of labor compensation after team members privately observe their own reservation wage. As labor productivity can only be high if the number of quits does not exceed a threshold, decisions concerning acceptance of individual wage demands become interdependent. When a team is made up of salaried workers, a peculiar case of efficiency wage results. Moreover, inefficient team dissolution may occur. We then show that inefficiency is less likely to occur when team members form a partnership.

Uninformed customers and nonprofit organization : Modelling 'contract failure' theory

Abstract When product quality is unobservable before purchase, the equilibrium price may be inefficiently high in order to signal high quality. We present a reputation model where under reasonable assumption nonprofit organizations can credibly charge lower prices than for-profit organizations.

Basque versus Illyrian labor-managed firms: The problem of property rights☆

Abstract The property-rights structure of the “Basque” firm, directly derived from Mondragon industrial cooperatives, is discussed in this paper which focuses on two prominent characteristics: the “capital accounts” and the collective reserve fund. It is shown that the Basque firm, although it does not allow membership rights to be traded, is in a better position than the Illyrian firm to cope with problems of weak property rights, in particular the lack of personal commitment and incorrect incentives for both the admission of new members and investment.

ON MUTUAL BENEFIT AND SACRIFICE: A COMMENT ON BRUNI AND SUGDEN'S ‘FRATERNITY’

This note comments on Bruni and Sugdens interesting notion of fraternity among contract partners as joint commitment to cooperate for mutual benefit. I raise two points on their paper, both concerning the role of sacrifice. First I maintain that, differently from other social preferences, guilt aversion (or warm glow) does not imply self-sacrifice. Secondly, I argue that aiming for mutual benefit does not prevent individuals from facing trade-offs between their own and their partners’ surplus, so the notion of sacrifice cannot be entirely eschewed. To the contrary, reciprocal ‘sacrifices’ enhance cooperative intentions and help create feelings of friendliness.

Exchanges? Encounters! a Note on Economics and Interpersonal Relations

In this paper, the author focuses on personalized interactions, or ‘encounters’, that are presented as peculiar productive processes producing – among more usual outputs such as transactions – ‘relational goods’. This theoretical framework allows us to push the economic discourse deeper into a variety of social and economic phenomena: the examples presented include work teams, company social events, migration and volunteering. Last, consideration of relational goods and assets questions both the usual meaning of efficiency and the behaviours recommended to achieve it.

On the performance of worker-managed firms: Does participation only exert "technical" effects?

Abstract We consider those studies of worker-managed firms that estimate production functions augmented to include indexes of worker participation. We argue that, when output is measured by value added, participation can affect output not only via technical effects, as usually interpreted, but also via distinct economic effects. We formalize a situation in which the choice of product type and the expected profitability of the firm depend on the amount of collective reserves and the proportion of workers that are members.

Community repeated interaction and strategic delegation

A large population of fixed-type agents engage in exclusive pairwise relationships in a decentralized setting. At the onset, agents randomly meet in pairs under private information of individual time-invariant types. They play a voluntary contribution game. At the end of the first period, members of each pair either stay together in the second period, in which case reported information is common knowledge, or quit and meet randomly new partners, under private information of individual types. Thus, either long-term or short-term relationships may arise. We show that there are values of the parameters such that information extracted in the first period has a positive effect on social efficiency. We give an interpretation of our results in terms of advantageous delegation of decisions to uninformed agents. Finally, we consider several extensions of the model in which our results still hold.

On the economic value of repeated interactions under adverse selection

The paper studies, in a repeated interaction setting, how the presence of cooperative agents in a heterogeneous community organized in groups affects efficiency and group stability. The paper expands on existing literature by assuming that each type can profitably mimic other types. It is shown that such enlargement of profitable options prevents group stabilization in the single group case. Stabilization can be obtained with many groups, but its driver is not the efficiency gain due to the presence of cooperative individuals. Rather, stabilization is the result of free riding opportunities.