IDEAS home Printed from https://ideas.repec.org/h/pal/intecp/978-0-230-30211-2_7.html
   My bibliography  Save this book chapter

A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): the Multi-stakeholder Model of Corporate Governance

In: Corporate Social Responsibility and Corporate Governance

Author

Listed:
  • Lorenzo Sacconi

Abstract

This is the first part of a comprehensive essay on the Rawlsian view of corporate social responsibility (in short, CSR). CSR is defined as a multi-stakeholder model of corporate governance and objective function based on the extension of fiduciary duties towards all of the firm’s stakeholders (see section 2). A rationale for this idea is given firstly within the perspective of new institutional economic theory in terms of transaction costs efficiency. From this perspective, abuse of authority in regard to the non-controlling stakeholders emerges as the main unsolved problem, and makes it impossible to sever efficiency from equity within the domain of corporate governance (section 3). Intuitively, a Rawlsian principle of redress emerges as the natural answer to the legitimization problem of ownership and control rights allocations when, in order to provide incentives to one party (the incentive to undertake important specific investments), they give it a disproportionate advantage over other non-controlling stakeholders.

Suggested Citation

  • Lorenzo Sacconi, 2011. "A Rawlsian View of CSR and the Game Theory of its Implementation (Part I): the Multi-stakeholder Model of Corporate Governance," International Economic Association Series, in: Lorenzo Sacconi & Margaret Blair & R. Edward Freeman & Alessandro Vercelli (ed.), Corporate Social Responsibility and Corporate Governance, chapter 7, pages 157-193, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-0-230-30211-2_7
    DOI: 10.1057/9780230302112_7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, April.
    2. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    3. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    4. Drew Fudenberg & David K. Levine, 2008. "Reputation And Equilibrium Selection In Games With A Patient Player," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 7, pages 123-142, World Scientific Publishing Co. Pte. Ltd..
    5. Arthur T. Denzau & Douglass C. North, 1994. "Shared Mental Models: Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 47(1), pages 3-31, February.
    6. Lorenzo Sacconi & Marco Faillo, 2010. "Conformity, reciprocity and the sense of justice. How social contract-based preferences and beliefs explain norm compliance: the experimental evidence," Constitutional Political Economy, Springer, vol. 21(2), pages 171-201, June.
    7. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    8. Masahiko Aoki, 2013. "Endogenizing institutions and institutional changes," Chapters, in: Comparative Institutional Analysis, chapter 16, pages 267-297, Edward Elgar Publishing.
    9. Raghuram G. Rajan & Luigi Zingales, 1998. "Power in a Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 387-432.
    10. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, April.
    11. Lorenzo Sacconi, 2008. "CSR as contractarian model of multi-stakeholder corporate governance and the game-theory of its implementation," Department of Economics Working Papers 0818, Department of Economics, University of Trento, Italia.
    12. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    13. Gianluca Grimalda & Lorenzo Sacconi, 2005. "The Constitution of the Not-For-Profit Organisation: Reciprocal Conformity to Morality," Constitutional Political Economy, Springer, vol. 16(3), pages 249-276, September.
    14. Ken Binmore, 1998. "Game Theory and the Social Contract - Vol. 2: Just Playing," MIT Press Books, The MIT Press, edition 1, volume 2, number 0262024446, April.
    15. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    16. Ken Binmore, 1994. "Game Theory and the Social Contract, Volume 1: Playing Fair," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262023636, April.
    17. Lorenzo Sacconi, 2007. "A Social Contract Account for CSR as an Extended Model of Corporate Governance (II): Compliance, Reputation and Reciprocity," Journal of Business Ethics, Springer, vol. 75(1), pages 77-96, September.
    18. Binmore, Ken, 1987. "Modeling Rational Players: Part I," Economics and Philosophy, Cambridge University Press, vol. 3(2), pages 179-214, October.
    19. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    20. Lorenzo Sacconi, 2011. "A Rawlsian View of CSR and the Game Theory of its Implementation (Part II): Fairness and Equilibrium," International Economic Association Series, in: Lorenzo Sacconi & Margaret Blair & R. Edward Freeman & Alessandro Vercelli (ed.), Corporate Social Responsibility and Corporate Governance, chapter 8, pages 194-252, Palgrave Macmillan.
    21. Marco Faillo & Lorenzo Sacconi, 2007. "Norm compliance: the contribution of behavioral economics models," Department of Economics Working Papers 0704, Department of Economics, University of Trento, Italia.
    22. Lorenzo Sacconi, 2006. "A Social Contract Account for CSR as an Extended Model of Corporate Governance (I): Rational Bargaining and Justification," Journal of Business Ethics, Springer, vol. 68(3), pages 259-281, October.
    23. Andrew Kakabadse & Mette Morsing, 2006. "Introduction: Corporate Social Responsibility — Reconciling Aspiration with Application," Palgrave Macmillan Books, in: Andrew Kakabadse & Mette Morsing (ed.), Corporate Social Responsibility, pages 1-6, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Suzanne Young & Vijaya Thyil, 2014. "Corporate Social Responsibility and Corporate Governance: Role of Context in International Settings," Journal of Business Ethics, Springer, vol. 122(1), pages 1-24, June.
    2. Lorenzo Sacconi, 2011. "A Rawlsian View of CSR and the Game Theory of its Implementation (III): Conformism, Equilibrium Refinement and Selection," Palgrave Macmillan Books, in: Lorenzo Sacconi & Giacomo Degli Antoni (ed.), Social Capital, Corporate Social Responsibility, Economic Behaviour and Performance, chapter 2, pages 42-79, Palgrave Macmillan.
    3. Matteo Rossi & Jamel Chouaibi & Salim Chouaibi & Wafa Jilani & Yamina Chouaibi, 2021. "Does a Board Characteristic Moderate the Relationship between CSR Practices and Financial Performance? Evidence from European ESG Firms," JRFM, MDPI, vol. 14(8), pages 1-15, August.
    4. Degli Antoni, Giacomo & Sacconi, Lorenzo, 2013. "Social responsibility, activism and boycotting in a firm–stakeholders network of games with players’ conformist preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 216-226.
    5. Silvia Sacchetti & Carlo Borzaga, 2021. "The foundations of the “public organisation”: governance failure and the problem of external effects," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 731-758, September.
    6. Eleanor Burt & Samuel Mansell, 2019. "Moral Agency in Charities and Business Corporations: Exploring the Constraints of Law and Regulation," Journal of Business Ethics, Springer, vol. 159(1), pages 59-73, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lorenzo Sacconi, 2011. "A Rawlsian View of CSR and the Game Theory of its Implementation (III): Conformism, Equilibrium Refinement and Selection," Palgrave Macmillan Books, in: Lorenzo Sacconi & Giacomo Degli Antoni (ed.), Social Capital, Corporate Social Responsibility, Economic Behaviour and Performance, chapter 2, pages 42-79, Palgrave Macmillan.
    2. Lorenzo Sacconi, 2013. "Ethics, economic organization and the social contract," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 7, Edward Elgar Publishing.
    3. Lorenzo Sacconi, 2013. "The economics of corporate social responsibility," Chapters, in: Luigino Bruni & Stefano Zamagni (ed.), Handbook on the Economics of Reciprocity and Social Enterprise, chapter 38, pages 372-399, Edward Elgar Publishing.
    4. Degli Antoni, Giacomo & Sacconi, Lorenzo, 2013. "Social responsibility, activism and boycotting in a firm–stakeholders network of games with players’ conformist preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 216-226.
    5. Magali Fia & Lorenzo Sacconi, 2019. "Justice and Corporate Governance: New Insights from Rawlsian Social Contract and Sen’s Capabilities Approach," Journal of Business Ethics, Springer, vol. 160(4), pages 937-960, December.
    6. Giacomo Degli Antoni & Lorenzo Sacconi, 2010. "Modeling Cognitive Social Capital and Corporate Social Responsibility (CSR) as Preconditions for Sustainable Networks of Relations," Econometica Working Papers wp19, Econometica.
    7. Lorenzo Sacconi, 2008. "CSR as contractarian model of multi-stakeholder corporate governance and the game-theory of its implementation," Department of Economics Working Papers 0818, Department of Economics, University of Trento, Italia.
    8. Lorenzo Sacconi, 2012. "Corporate Social Responsibility and Corporate Governance," Econometica Working Papers wp38, Econometica.
    9. Yoshifumi Hino & Yusuke Zennyo, 2017. "Corporate social responsibility and strategic relationships," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(3), pages 231-244, September.
    10. Alessandro Zattoni, 2011. "Who Should Control a Corporation? Toward a Contingency Stakeholder Model for Allocating Ownership Rights," Journal of Business Ethics, Springer, vol. 103(2), pages 255-274, October.
    11. Virginia Cecchini Manara & Lorenzo Sacconi, 2019. "Compliance with socially responsible norms of behavior: reputation vs. conformity," Econometica Working Papers wp73, Econometica.
    12. Patrick W. Schmitz, 2006. "Information Gathering, Transaction Costs, and the Property Rights Approach," American Economic Review, American Economic Association, vol. 96(1), pages 422-434, March.
    13. Patrick W. Schmitz, 2001. "Partial Privatization and Incomplete Contracts: The Proper Scope of Government Reconsidered," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(4), pages 394-411, August.
    14. Gersbach, Hans & Haller, Hans, 2020. "On efficient firm formation," Mathematical Social Sciences, Elsevier, vol. 107(C), pages 1-12.
    15. Schmitz, Patrick W., 2010. "Contractual solutions to hold-up problems with quality uncertainty and unobservable investments," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 807-816, September.
    16. Allen Kaufman & Ernie Englander, 2011. "Behavioral Economics, Federalism, and the Triumph of Stakeholder Theory," Journal of Business Ethics, Springer, vol. 102(3), pages 421-438, September.
    17. Bernard Baudry & Bruno Tinel, 2003. "Une analyse théorique des fondements et du fonctionnement de la relation d'autorité intrafirme," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270902, HAL.
    18. Andreas Roider, 2006. "Delegation of Authority as an Optimal (In)Complete Contract," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(3), pages 391-411, September.
    19. Lorenzo Sacconi, 2011. "A Rawlsian View of CSR and the Game Theory of its Implementation (Part II): Fairness and Equilibrium," International Economic Association Series, in: Lorenzo Sacconi & Margaret Blair & R. Edward Freeman & Alessandro Vercelli (ed.), Corporate Social Responsibility and Corporate Governance, chapter 8, pages 194-252, Palgrave Macmillan.
    20. Lorenzo Sacconi, 2001. "Incomplete contracts and corporate ethics: a game theoretical model under fuzzy information," LIUC Papers in Ethics, Law and Economics 91, Cattaneo University (LIUC).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:intecp:978-0-230-30211-2_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.