Abstract
We focus on how individual behavior that complies with social norms interferes with performance-based incentive mechanisms in organizations with multiple distributed decision-making agents. We model social norms to emerge from interactions between agents: agents observe other the agents’ actions and, from these observations, induce what kind of behavior is socially acceptable. By complying with the induced socially accepted behavior, agents experience utility. Also, agents get utility from a pay-for-performance incentive mechanism. Thus, agents pursue two objectives. We place the interaction between social norms and performance-based incentive mechanisms in the complex environment of an organization with distributed decision-makers, in which a set of interdependent tasks is allocated to multiple agents. The results suggest that, unless the sets of assigned tasks are highly correlated, complying with emergent socially accepted behavior is detrimental to the organization’s performance. However, we find that incentive schemes can help offset the performance loss by applying individual-based incentives in environments with lower task-complexity and team-based incentives in environments with higher task-complexity.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
Note that along with social norms at the individual level, previous research also addresses social norms at the level of organizations: Dowling et al. [12], for example, conceptualize organizational legitimacy as congruence between the social values associated with an organization’s action and the norms of acceptable behavior in the social system of the organization. This paper, however, focuses on social norms within an organization.
- 2.
- 3.
In our context linear incentives are as efficient as other contracts inducing non-boundary actions. See [16, p. 1461].
- 4.
We use the bidirectional ring network topology, in which each node is connected to exactly two other nodes with reciprocal unidirectional links, where nodes represent agents and the links represent sharing of information.
- 5.
Levinthal [27] describes situations in which agents switch more than one decision at a time as long jumps and states that such scenarios are less likely to occur, as it is hard or risky to change multiple processes simultaneously.
- 6.
Note that agents are homogeneous with respect to goals and that goals are constant over time.
- 7.
For reliable results, we generate the entire landscapes before the simulation, which is computationally feasible for \(P=4\) given modern RAM sizes. Our sensitivity analyses with simpler models without entire landscapes, suggest that the results also hold for larger population sizes.
- 8.
References
Ajzen, I.: The theory of planned behavior. Organ. Behav. Human Decis. Process. 50(2), 179–211 (1991)
Alechina, N., Dastani, M., Logan, B.: Norm specification and verification in multi-agent systems. J. Appl. Logics-IFCoLog J. Logics Appl. 5(2), 457–490 (2018)
Andreoni, J., Petri, R.: Social Motives to Giving: Can These Explain Fund Raising Institutions? University of Wisconsin, Technical report (2000)
Axelrod, R.: The Complexity of Cooperation: Agent-Based Models of Competition and Collaboration. Princeton University Press, Princeton (1997)
Benabou, R., Tirole, J.: Intrinsic and extrinsic motivation. Rev. Econ. Stud. 70(3), 489–520 (2003)
Bernheim, B.D.: A theory of conformity. J. Polit. Econ. 102(5), 841–877 (1994)
Charnes, A., Cooper, W.W.: Management models and industrial applications of linear programming. Manag. Sci. 4(1), 38–91 (1957)
Cialdini, R., Reno, R., Kallgren, C.: A focus theory of normative conduct: recycling the concept of norms to reduce littering in public places. J. Pers. Social Psychol. 58, 1015–1026 (1990)
Cialdini, R.B., Trost, M.R.: Social Influence: Social Norms, Conformity and Compliance. McGraw-Hill, New York (1998)
Coleman, J.S.: Free riders and zealots: the role of social networks. Sociol. Theory 6(1), 52–57 (1988)
Cranefield, S., Winikoff, M., Dignum, V., Dignum, F.: No pizza for you: value-based plan selection in BDI agents. In: IJCAI, pp. 178–184 (2017)
Dowling, J., Pfeffer, J.: Organizational legitimacy: social values and organizational behavior. Pac. Sociol. Rev. 18(1), 122–136 (1975)
Ehrhart, M.G., Naumann, S.E.: Organizational citizenship behavior in work groups: a group norms approach. J. Appl. Psychol. 89(6), 960 (2004)
Elster, J.: Social norms and economic theory. J. Econ. Perspect. 3(4), 99–117 (1989)
Festre, A.: Incentives and social norms: a motivation-based economic analysis of social norms. J. Econ. Surv. 24(3), 511–538 (2010)
Fischer, P., Huddart, S.: Optimal contracting with endogenous social norms. Am. Econ. Rev. 98(4), 1459–1475 (2008)
Glazer, A., Konrad, K.A.: A signaling explanation for charity. Am. Econ. Rev. 86(4), 1019–1028 (1996)
Hayek, F.A.: Studies in Philosophy, Politics and Economics. University of Chicago Press, Chicago (1967)
Huck, S., Kübler, D., Weibull, J.: Social norms and economic incentives in firms. J. Econ. Behav. Organ. 83(2), 173–185 (2012)
Iversion, K.E.: A Programming Language. Wiley, Hoboken (1962)
Janssen, M.C.W., Mendys-Kamphorst, E.: The price of a price: on the crowding out and in of social norms. J. Econ. Behav. Organ. 55(3), 377–395 (2004)
Kauffman, S.A., Johnsen, S.: Coevolution to the edge of chaos: coupled fitness landscapes, poised states, and coevolutionary avalanches. J. Theor. Biol. 149(4), 467–505 (1991). https://doi.org/10.1016/S0022-5193(05)80094-3
Kauffman, S.A., Weinberger, E.D.: The NK model of rugged fitness landscapes and its application to maturation of the immune response. J. Theor. Biol. 141, 211–245 (1989)
Kohlberg, L.: The psychology of moral development: essays on moral development, vol. 2 (1984)
Kübler, D.: On the regulation of social norms. J. Law Econ. Organ. 17(2), 449–476 (2001)
Leitner, S., Wall, F.: Multiobjective decision making policies and coordination mechanisms in hierarchical organizations: results of an agent-based simulation. Sci. World J. (2014). https://doi.org/10.1155/2014/875146
Levinthal, D.A.: Adaptation on rugged landscapes. Manag. Sci. 43(7), 934–950 (1997)
Lewis, D.: Convention: A Philosophical Study. John Wiley & Sons, Hoboken (1969)
Lieberman, A., Duke, K.E., Amir, O.: How incentive framing can harness the power of social norms. Organ. Behav. Human Decis. Processes 151, 118–131 (2019)
Mahmoud, M.A., Ahmad, M.S., Mostafa, S.A.: Norm-based behavior regulating technique for multi-agent in complex adaptive systems. IEEE Access 7, 126662–126678 (2019)
Mellema, R., Jensen, M., Dignum, F.: Social rules for agent systems (2020)
Moffitt, R.: An economic model of welfare stigma. Am. Econ. Rev. 73(5), 1023–1035 (1983)
Morris-Martin, A., De Vos, M., Padget, J.: Norm emergence in multiagent systems: a viewpoint paper. Auton. Agents Multi-Agent Syst. 33(6), 706–749 (2019). https://doi.org/10.1007/s10458-019-09422-0
Paluck, E.L., Shepherd, H.: The salience of social referents: a field experiment on collective norms and harassment behavior in a school social network. J. Pers. Social Psychol. 103(6), 899 (2012)
Sen, S., Airiau, S.: Emergence of norms through social learning. In: IJCAI, vol. 1507, p. 1512 (2007)
Smith, A.: The theory of moral sentiments, vol. 1. J. Richardson (1822)
Tuomela, R., Bonnevier-Tuomela, M.: Norms and agreement. Eur. J. Law Phil. Comput. Sci. 5, 41–46 (1995)
Veblen, T.: The Theory of the Leisure Class. Houghton Mifflin, Boston (1973)
Vendrik, M.C.M.: Dynamics of a household norm in female labour supply. J. Econ. Dyn. Control 27(5), 823–841 (2003)
Verel, S., Liefooghe, A., Jourdan, L., Dhaenens, C.: On the structure of multiobjective combinatorial search space: Mnk-landscapes with correlated objectives. Eur. J. Oper. Res. 227(2), 331–342 (2013)
Wall, F., Leitner, S.: Agent-based computational economics in management accounting research: opportunities and difficulties. J. Manag. Account. Res. (2020). https://doi.org/10.2308/JMAR-19-073
Xie, X.F., Zhang, W.J., Yang, Z.L.: Social cognitive optimization for nonlinear programming problems. In: Proceedings. International Conference on Machine Learning and Cybernetics, vol. 2, pp. 779–783. IEEE (2002)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 Springer Nature Switzerland AG
About this paper
Cite this paper
Khodzhimatov, R., Leitner, S., Wall, F. (2022). Interactions Between Social Norms and Incentive Mechanisms in Organizations. In: Theodorou, A., Nieves, J.C., De Vos, M. (eds) Coordination, Organizations, Institutions, Norms, and Ethics for Governance of Multi-Agent Systems XIV. COINE 2021. Lecture Notes in Computer Science(), vol 13239. Springer, Cham. https://doi.org/10.1007/978-3-031-16617-4_8
Download citation
DOI: https://doi.org/10.1007/978-3-031-16617-4_8
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-16616-7
Online ISBN: 978-3-031-16617-4
eBook Packages: Computer ScienceComputer Science (R0)