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Spagnolo, G. (1999). Social relations and cooperation in organizations. Journal of Economic Behavior & Organization 38 (1), 1-25.

This paper addresses the effects of social relations on cooperation (or collusion) in organizations (or communities). Social and production relations are modeled as separate repeated strategic interactions. “Linking” them – by employing members of the same community or encouraging social interaction between employees – facilitates cooperation in production: (a) because of available “social capital,” the slack of enforcement power present in social relations which may discipline behavior in the workplace; (b) because payoffs from the two relations are substitutes, therefore the linkage endogenously generates social capital; (c) because the linkage generates transfers of “trust”; and (d) it discloses information about agents' situation.


Spagnolo, Giancarlo

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