Zeitoun, Hossam, Melkonyan, Tigran A. and Chater, Nick (2022) The social contract in miniature : how virtual bargaining supports team production. Academy of Management Review . doi:10.5465/amr.2020.0229 ISSN 0363-7425. (In Press)

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Abstract

The ability of teams to self-organize and engage in spontaneous collaboration is crucial to 21st-century organizations. The large extent of nonroutine activities in such organizations hampers the effectiveness of traditional management instruments, such as monitoring effort and performance levels and exercising fiat—resulting in increasingly important self-organized collaboration. To explain how such collaboration is possible, we suggest a refinement of the psychological assumptions underpinning influential theories of the firm—specifically, concerning how people reason. We juxtapose Nash reasoning (the mode of reasoning underpinning organizational economic theories of the firm) with virtual bargaining (a more collaborative mode of reasoning drawing on recent research in cognitive science). Virtual bargaining enables individuals to establish, maintain, and abide by tacit “social contracts” of their team and organization—the (often tacit) norms, rules, roles, and responsibilities governing how employees should behave (irrespective of their personal objectives). Thus, virtual bargaining helps individuals mitigate challenges of team production, such as shirking and hold-up, in a self-organizing and self-enforcing way. We analyze the conditions under which virtual bargaining leads individuals to coordinate on enhanced effort levels in organizationally relevant settings. We outline avenues for empirically testing virtual bargaining in organizations and discuss conceptual implications.

Item Type:	Journal Article
Subjects:	B Philosophy. Psychology. Religion > BF Psychology H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor J Political Science > JC Political theory
Divisions:	Faculty of Social Sciences > Warwick Business School > Behavioural Science Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH):	Cognitive science , Decision making , Organizational behavior -- Economic aspects, Industrial organization (Economic theory), Social contract , Productivity bargaining , Teams in the workplace
Journal or Publication Title:	Academy of Management Review
Publisher:	Academy of Management
ISSN:	0363-7425
Official Date:	17 January 2022
Dates:	Date Event 17 January 2022 Published 24 December 2021 Accepted
DOI:	10.5465/amr.2020.0229
Status:	Peer Reviewed
Publication Status:	In Press
Access rights to Published version:	Restricted or Subscription Access
Copyright Holders:	Copyright 2021
Date of first compliant deposit:	4 January 2022
Date of first compliant Open Access:	17 January 2023
RIOXX Funder/Project Grant:	Project/Grant ID RIOXX Funder Name Funder ID SG170033 British Academy http://dx.doi.org/10.13039/501100000286 ES/P008976/1 [ESRC] Economic and Social Research Council http://dx.doi.org/10.13039/501100000269 RP2012-V-022 Leverhulme Trust http://dx.doi.org/10.13039/501100000275
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