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Self-organization

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Roman Sheremeta, Ph.D.

Professor, Weatherhead School of Management

Case Western Reserve University

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Part 1: Design Principles of Self-Organizing

Part 2: Mechanism Facilitating Cooperation

Part 3: Social Norms

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Part 1: �Design Principles of Self-Organizing

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Self-organization�

  • In many cases government regulation and private ownership fail to solve collective action problems.

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  • Elinor Ostrom, a recipient of the 2009 Nobel Prize in Economics, suggested that local common good management can be done without government intervention.
    • Much of what we know about community self-organization comes from the research of Elinor Ostrom.
    • Ostrom and her colleagues looked at how real-world communities manage communal resources, such as fisheries, land irrigation systems, and farmlands, and they identified a number of factors conducive to successful resource management.

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Design principles�

    • Ostrom (1990) identified eight “design principles” of stable common goods management:
    • (1) Well-defined boundaries: clear definition of the contents of the common pool resource.
    • (2) Local suitability: rules are adapted to local conditions.
    • (3) Collective agreement: allows most resource appropriators to participate in the decision-making process.
    • (4) Monitoring: makes those who do not comply with rules visible to the community.
    • (5) Graduated sanctions: sanctions are proportional to the severity of violations.
    • (6) Conflict-resolution mechanisms: systems with low-cost conflict resolution mechanisms are more likely to survive.
    • (7) Minimum recognition of rights: government agencies do not challenge the right of local users to create their own institutions.
    • (8) Nested enterprises: multiple layers of nested enterprises.

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Case study�

  • The Maine Lobster Marketing Collaborative

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Case study�

  • The Maine Lobster Marketing Collaborative

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  • Rules and regulations that help to protect the resource:
    • Tail notching: female lobsters with visible eggs cannot be harvested.
    • Minimum size limit: minimum 3 1/4″, allowing juvenile lobsters the chance to mature and reproduce.
    • Maximum size limit: maximum 5″, protecting the large, healthy breeding stock.
    • Apprentice program: new harvesters must apprentice with veterans to learn the regulated, sustainable practices.
    • Trap limits: the total number of traps per harvester is limited.
    • Harvest method: harvesting is by trap only.
    • Lobster seed fund: the fund purchases females that extrude their eggs after being harvested.

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Part 2: �Mechanism Facilitating Cooperation

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Communication�

  • Balliet (2010) reviews 45 studies examining the impact of communication on cooperation in social dilemmas and finds:
    • Communication significantly improves coordination (by 50%-100%).
    • Face-to-face communication is more than twice as effective as written messages.
    • The communication-cooperation relationship is stronger in larger, compared to smaller, groups.
    • The timing of communication (before or during iterated dilemmas) is not as important.

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Public goods�

  • Experiment #2:
    • Public goods game

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Cooperation

Defection

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Public goods with communication�

  • Experiment #3:
    • Public goods game with communication

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Cooperation

Defection

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Punishment�

  • Fehr and Gachter (2000) were among the first to show that self-organized social punishment increases cooperation.

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  • Their main findings:
    • The availability of punishment increases cooperation.
    • Punishments are primarily aimed at those who contribute less than the group average.
    • The grater the deviation from the group average, the greater the punishment.
    • Punishment is more effective among partners rather than strangers.

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Public goods�

  • Experiment #2:
    • Public goods game

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Cooperation

Defection

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Public goods with punishment�

  • Experiment #4:
    • Public goods game with punishment

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Cooperation

Defection

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Punishment�

  • Gürerk et al. (2006) study behavior in a public goods game where participants can choose to be in either a sanctioning environment (SI) or a sanction-free environment (SFI).

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  • Their main findings:
    • Initially, participants choose the SFI over the SI.
    • However, participants in the SI contribute significantly more than in the SFI.
    • Over time the SI becomes the predominant institution and eventually close to 100% of participants chooses the SI.

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Other mechanisms�

  • Other mechanisms facilitating cooperation (Chaudhuri, 2011):
    • Transparency of actions.
    • Enhancing group identity (self-selection into different groups).
    • Non-monetary punishment.
    • Expelling free riders (ostracism).
    • Rewarding cooperators.
    • Introducing between-group competition.
    • Leading by example.
    • Monitoring (having others watch your actions).
    • Etc.

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Part 3: �Social Norms

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Social norms�

  • Social norms are the unwritten rules of behavior that are considered acceptable in a group or society.
    • Norms function to provide order and predictability in society.
    • When people know what is expected of them they tend to comply.

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  • Examples of social norms impacting collective action problem:
    • Don't invade someone's personal space.
    • Do not curse in public conversation.
    • Do not pick your nose in public.
    • Be kind to the elderly, like opening a door or giving up your seat.
    • Leave a tip for the waiter or waitress.
    • Chew with your mouth closed and avoid making loud sounds while chewing.
    • Do not use a cellphone during class.
    • Etc.

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Social norms�

  • Cycling in Copenhagen:
    • Copenhagen is world famous for its cycling culture, but the bike culture of Copenhagen was threatened in the 1960s with the advent of car culture.
    • People in Copenhagen have spent several decades seeking ways to “take the city back” and reestablishing the bike as a most popular means of transport.
    • Through many years of community-led efforts, the city now boasts some of the most extensive infrastructures for cyclists and most bicycle-friendly practices thanks to the consistency in prioritizing cyclists on the street.
    • In addition, cycling is considered as a basic skill in Copenhagen. Most children are taught to ride a bike at home.
    • All this helps make cycling an ingrained part of Copenhagen’s culture and (re)establishes cycling as a social norm in Copenhagen.
    • Given how strong this social norm is, it is easy to forget that this wasn’t always the case and that quite a lot of citizen effort was required to make Copenhagen what it is today.

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Social norms�

  • Cycling as a Social Norm in Copenhagen

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References�

  • Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge University Press.
  • Chaudhuri, A. (2011). Sustaining cooperation in laboratory public goods experiments: A selective survey of the literature. Experimental Economics, 14(1), 47-83.
  • Gürerk, Ö., Irlenbusch, B., & Rockenbach, B. (2006). The competitive advantage of sanctioning institutions. Science, 312, 108–111.
  • Fehr, E., & Gachter, S. (2000). Cooperation and punishment in public goods experiments. American Economic Review, 90(4), 980-994.
  • Balliet, D. (2010). Communication and cooperation in social dilemmas: A meta-analytic review. Journal of Conflict Resolution, 54, 39-57.
  • Bandiera, O., Barankay, I., & Rasul, I. (2005). Cooperation in collective action. Economics of Transition, 13(3), 473-498.

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