A Reconsideration of the Nature of Firm: an Empirical Study Based on Social Neuroeconomics
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| Title | A Reconsideration of the Nature of Firm: an Empirical Study Based on Social Neuroeconomics
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| Author | Zhang Xian and Wei Zhongxu |
| Organization | School of Economics, Sichuan University |
| Email | zxscu@126.com；cafucwzx@163.com |
| Key Words | Institutional Settings; Social Preferences; Ultimatum Game; Behavioral Experiments |
| Abstract | The modern firm theory succeeds to explain the existence and extension of firm with transaction costs but fails to explain the coordination advantages of firm relative to market based on the self-interest behavior assumptions. It is the only way out of the theoretical dilemma that the social preference function would be incorporated into the nature of firm. Based on the evidences from the social neuroeconomics, the firm can be regarded as a social preferences strengthening mechanism which saves some transaction cost. The experimental evidences of Ultimatum Game under the control variable of institutional settings had revealed that the social decision-making is observably related to the social situations. Relative to the market situation, organizational situation provides more abundant social rewards which will induce the social preferences. The theorem that the social preferences depend on the institutional settings may offer some new perspectives for the market-oriented practice and theory of organizational coordination. |
| Serial Number | WP1035 |
| Time | 2016-03-11 |
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