Constitutional Political Economy

, Volume 16, Issue 3, pp 249–276 | Cite as

The Constitution of the Not-For-Profit Organisation: Reciprocal Conformity to Morality

  • Gianluca Grimalda
  • Lorenzo Sacconi


We investigate the link between individual motivations and economic organisations by focusing on the case of non-profit firms. First, we provide a model of individual behaviour that allows for agents to have motivations different from self-interest. We assume that individuals desire to comply with the prescriptions of a universally recognised moral principle conditionally on the expectation of similar compliance by other agents. This principle will shape the constitution of the non-profit organisation. Second, we study a simple ‘production game’ where a ‘for-profit’ and a ‘non-profit’ equilibria both exist. In the former, self-interested considerations prevail, so that agents implement the free-market standard; conversely, in the latter, conformist preferences are dominant, so that players act in such a way that the moral principle is fulfilled. The non-profit organisation is characterised in terms of a ‘social contract’ between the founders of the firm and its stakeholders. We also point out that the structure of the ‘psychological game’ underlying the interaction is akin to a co-ordination problem, so that the possibility of co-ordination failures underscores the risk of ‘distorting’ individual dispositions in the shift from the ‘micro’ level of the individuals to the ‘macro’ level of the organisation as a whole.


Non-profit non-self-interested motivations conformism reciprocity ideology 


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Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Centre for the Studey of Globalisation and Regionalisation(CSGR)University of WarwickCoventryUK
  2. 2.Department of Economics, University of Trento and Econometica (inter university center)university milano-BicoccaItaly

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