This article develops the notion of reciprocal stakeholder behavior by applying the concept of reciprocal behavior from experimental economics to stakeholder theory. A reciprocal stakeholder behavior model shows under which conditions stakeholders can translate normative demands for prosocial corporate behavior into economic incentives for companies through reciprocal sanctions. The author argues effective reciprocal stakeholder sanctions represent a strong mechanism to implement normative stakeholder demands for prosocial corporate behavior. Conceptually, the author introduces behavioral motives as an important element of stakeholder behavior and stakeholder influence. The argument shows that the notion of reciprocal stakeholder behavior adds substantially to a better understanding of (a) how normative stakeholder demands for prosocial corporate behavior are formulated, and (b) why and under which conditions companies voluntarily comply with stakeholder demands for prosocial corporate behavior that goes beyond legal requirements.
AgleB. R.DonaldsonT.FreemanR. E.JensenM. C.MitchellR. K.WoodD. J. (2008). Dialogue: Toward superior stakeholder theory. Business Ethics Quarterly, 18, 153-190.
2.
AndreoniJ.BrownP.VesterlundL. (2002). What makes an allocation fair? Some experimental evidence. Games and Economic Behavior, 40(1), 1-24.
3.
AndreoniJ.HarbaughW.VesterlundL. (2003). The carrot or the stick: Rewards, punishments and cooperation. American Economic Review, 93, 893-902.
4.
AxelrodR. (1984). The evolution of cooperation. New York, NY: Basic Books.
5.
BarnettM. L. (2007). Stakeholder influence capacity and the variability of financial returns to corporate social responsibility. Academy of Management Review, 32, 794-816.
6.
BaronD. (2002). Private politics and private policy: A theory of boycotts (Research Paper No. 1766). Stanford, CA: Stanford Graduate School of Business.
7.
BergerP.LuckmannT. (1966). The social construction of reality: A treatise in the sociology of knowledge. Garden City, NY: Doubleday & Comp.
8.
BoltonG.BrandtsJ.KatokE.OckenfelsA.ZwickR. (2002). Testing theories of other-regarding behavior. A sequence of four laboratory studies (Papers on strategic interaction, 43-2002). Jena, Germany: Max Planck Institute for Research into Economic Systems.
9.
BoltonG.BrandtsJ.OckenfelsA. (2001). Fair procedures: Evidence from games involving lotteries (Working paper). Magdeburg, Germany: University of Magdeburg.
10.
BoltonG.KatokE.OckenfelsA. (2001). What’s in a reputation? Indirect reciprocity in an image scoring game (Working paper). University Park, PA: Smeal College of Business, Penn State University.
11.
BoltonG.OckenfelsA. (2000). ERC: A theory of equity, reciprocity and competition. American Economic Review, 90, 166-193.
12.
BoltonG.OckenfelsA. (2002). A stress test of fairness measures in models of social utility (Papers on strategic interaction, 29-2002). Jena, Germany: Max Planck Institute for Research into Economic Systems.
13.
BosseD. A.PhillipsR. A.HarrisonJ. S. (2009). Stakeholders, reciprocity, and firm performance. Strategic Management Journal, 30, 447-456.
14.
BowlesS.GintisH. (2000). Reciprocity, self-interest, and the welfare state. Nordic Journal of Political Economy, 26(1), 33-53.
15.
BrandtsJ.SchramA. (2001). Cooperation and noise in public goods experiments: Applying the contribution function approach. Journal of Public Economics, 79, 399-427.
16.
BrandtsJ.SolàC. (2001). Reference points and negative reciprocity in simple sequential games. Games and Economic Behavior, 36, 138-157.
17.
BriefA. P.MotowidloS. J. (1986). Prosocial organizational behaviors. Academy of Management Review, 11, 710-725.
18.
BrocknerJ. (2002). Making sense of procedural fairness: How high procedural fairness can reduce or heighten the influence of outcome favorability. Academy of Management Review, 27(1), 58-76.
19.
BrownM.FalkA.FehrE. (2002). Contractual incompleteness and the nature of market interactions (Working Paper No. 38). Zurich, Switzerland: University of Zurich.
20.
CameronL. (1999). Raising the stakes in the ultimatum game: Experimental evidence from Indonesia. Economic Inquiry, 37(1), 47-59.
21.
CampbellJ. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32, 946-967.
22.
ChongD. (2000). Rational lives: Norms and values in politics and society. Chicago, IL: University of Chicago Press.
23.
ClarksonM. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management Review, 20(1), 92-117.
24.
ColemanJ. (1990). Foundations of social theory. Cambridge, MA: Belknap Press of Harvard University Press.
25.
ColquittJ. A.WessonM. J.PorterC. O. L. H.ConlonD. E.NgK. Y. (2001). Justice at the millennium: A meta-analytic review of 25 years of organizational justice research. Journal of Applied Psychology, 86, 425-445.
26.
Costa-GomesM.ZaunerK. (2001). Ultimatum bargaining behavior in israel, japan, slovenia, and the united states: A social utility analysis. Games and Economic Behavior, 34, 238-269.
27.
CrouchC. (2006). Modeling the firm in its market and organizational environment: Methodologies for studying corporate social responsibility. Organization Studies, 27, 1533-1551.
28.
CummingsJ.DohJ. (2000). Identifying who matters: Mapping key players in multiple environments. California Management Review, 42(2), 83-104.
29.
den HondF.de BakkerF. (2007). Ideologically motivated activism: How activist groups influence corporate social change activities. Academy of Management Review, 32, 901-924.
30.
DiMaggioP.PowellW. (1983, April). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147-160.
31.
DonaldsonT. (1999). Making stakeholder theory whole. Academy of Management Review, 24, 237-241.
32.
DonaldsonT.PrestonL. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65-91.
33.
DowlingJ.PfefferJ. (1975). Organizational legitimacy: Social values and organizational behavior. Pacific Sociological Review, 18(1), 122-136.
34.
DriscollC.CrombieA. (2001). Stakeholder legitimacy management and the qualified good neighbor: The case of nova nada and jdi. Business & Society, 40, 442-471.
35.
DufwenbergM.GneezyU.GüthW.van DammeE. (2001). Direct versus indirect reciprocity: An experiment. In FrohnJ.GüthW.KliemtH.SeltenR. (Eds.), Making choices I (pp. 19-30). Munich, Germany: Accedo.
36.
DufwenbergM.LundholmM. (2001, July). Social norms and moral hazard. Economic Journal, 111, 506-525.
37.
ElsbachK. D.SuttonR. (1992). Acquiring organizational legitimacy through illegitimate actions: A marriage of institutional and impression management theories. Academy of Management Journal, 35, 699-738.
38.
EngelmannD.FischbacherU. (2002). Indirect reciprocity and strategic reputation building in an experimental helping game (Working Paper No. 132). Zurich, Switzerland: University of Zurich.
39.
FalkA.FehrE.FischbacherU. (2000). Appropriating the commons - A theoretical explanation (Working Paper No. 55). Zurich, Switzerland: University of Zurich.
40.
FalkA.FehrE.FischbacherU. (2001). Driving forces of informal sanctions (Working Paper No. 59). Zurich, Switzerland: University of Zurich.
41.
FalkA.FehrE.FischbacherU. (2003). On the nature of fair behavior. Economic Inquiry, 41(1), 20-26.
42.
FehrE.FalkA. (1999). Wage rigidity in a competitive incomplete contract market. Journal of Political Economy, 107(1), 106-134.
43.
FehrE.FalkA. (2002a). Psychological foundations of incentives (Joseph Schumpeter Lecture). European Economic Review, 46, 687-724.
44.
FehrE.FalkA. (2002b). Reciprocal fairness, cooperation and limits to competition. In FullbrookE. (Ed.), Intersubjectivity in economics: Agents and structures (pp. 28-42). London, UK: Routledge.
45.
FehrE.FischbacherU. (2002, March). Why social preferences matter - The impact of non-selfish motives on competition, cooperation and incentives. Economic Journal, 112, C1-C33.
46.
FehrE.FischbacherU. (2003). Third party sanctions and social norms. Unpublished manuscript.
47.
FehrE.FischbacherU.GächterS. (2002). Strong reciprocity, human cooperation and the enforcement of social norms. Human Nature, 13(1), 1-25.
48.
FehrE.FischbacherU.TougarevaE. (2002). Do high stakes and competition undermine fairness? Evidence from Russia (Working Paper No. 120). Zurich, Switzerland: University of Zurich.
49.
FehrE.GächterS. (1998). Reciprocity and economics: The economic implications of homo reciprocans. European Economic Review, 42, 845-860.
50.
FehrE.GächterS. (2000a). Cooperation and punishment in public goods experiments. American Economic Review, 90, 980-994.
51.
FehrE.GächterS. (2000b). Fairness and retaliation: The economics of reciprocity. Journal of Economic Perspectives, 14, 159-182.
52.
FehrE.SchmidtK. (1999). A theory of fairness, competition and cooperation. Quarterly Journal of Economics, 114, 817-868.
53.
FehrE.SchmidtK. (2000a). Fairness, incentives, and contractual choices. European Economic Review, 44, 1057-1068.
54.
FehrE.SchmidtK. (2000b). Theories of fairness and reciprocity - evidence and economic applications (Working Paper No. 75). Zurich, Switzerland: University of Zurich.
55.
FehrE.TyranJ.-R. (1997). Institutions and reciprocal fairness. Nordic Journal of Political Economy, 23(2), 133-144.
56.
FreemanR. E. (1984). Strategic management: A stakeholder approach. Boston, MA: Pitman.
57.
FreemanR. E. (1999). Divergent stakeholder theory. Academy of Management Review, 24, 233-236.
58.
FreyB.BohnetI. (1995). Institutions affect fairness: Experimental investigations. Journal of Institutional and Theoretical Economics, 151, 286-303.
59.
FriedmanM. (1970, September13). The social responsibility of business is to increase profits. New York Times Magazine, pp. 32-33, 122-126.
60.
FroomanJ. (1999). Stakeholder influence strategy. Academy of Management Review, 24, 191-205.
61.
FroomanJ.MurrellA. J. (2005). Stakeholder influence strategies: The roles of structural and demographic determinants. Business & Society, 44(1), 3-31.
62.
GächterS.FehrE. (1999). Collective action as a social exchange. Journal of Economic Behavior & Organization, 39, 341-370.
63.
GächterS.FehrE.KmentC. (1996). Does social exchange increase voluntary cooperation?Kyklos, 49, 541-554.
64.
GintisH. (2000). Strong reciprocity and human sociality. Journal of Theoretical Biology, 206, 169-179.
65.
GoodsteinJ. D.WicksA. C. (2007). Corporate and stakeholder responsibility: Making business ethics a two-way conversation. Business Ethics Quarterly, 17, 375-398.
66.
GranovetterM. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91, 481-510.
67.
GreeningD.TurbanD. (2000). Corporate social performance as a competitive advantage in attracting a quality workforce. Business & Society, 39, 254-280.
68.
GüthW.SchmittbergerR.SchwarzeB. (1982). An experimental analysis of ultimatum bargaining. Journal of Economic Behavior & Organization, 3, 367-388.
69.
GüthW.van DammeE. (1998). Information, strategic behavior, and fairness in ultimatum bargaining: An experimental study. Journal of Mathematical Psychology, 42, 227-247.
70.
HahnT. (2004). Why and when companies contribute to societal goals: The effect of reciprocal stakeholder behavior. Best paper proceedings of the 2004 Annual Conference of the Academy of Management, New Orleans, LA.
71.
HahnT. (2005). Gesellschaftliches Engagement von Unternehmen. Reziproke Stakeholder, ökonomische Anreize, strategische Gestaltungsoptionen [Corporate societal commitment: Reciprocal stakeholders, economic incentives, strategic implications]. Wiesbaden, Germany: Deutscher Universitäts-Verlag [German University Press].
72.
HandelmanJ.ArnoldS. (1999, July). The role of marketing actions with a social dimension: Appeals to the institutional environment. Journal of Marketing, 63, 33-48.
73.
HayakawaH. (2000). Bounded rationality, social and cultural norms, and interdependence via reference groups. Journal of Economic Behavior & Organization, 43(1), 1-34.
74.
HayashiN.OstromE.WalkerJ.YamagishiT. (1999). Reciprocity, trust, and the sense of control: A cross-societal study. Rationality and Society, 11(1), 27-46.
75.
HendryJ. (2003). Environmental NGOs and business: A grounded theory of assessment, targeting, and influencing. Business & Society, 42, 267-276.
76.
HenrichJ.BoydR.BowlesS.CamererC.FehrE.GintisH.McElreathR. (2001). Economics and social behavior—In search of homo economicus: Behavioral experiments in 15 small-scale societies. American Economic Review, 91(2), 73-78.
77.
HillC. (1990). Cooperation, opportunism, and the invisible hand: Implications for transaction cost theory. Academy of Management Review, 15, 500-513.
78.
HillC.JonesT. (1992). Stakeholder-agency theory. Journal of Management Studies, 29, 131-154.
79.
HoffmanE.McCabeK.SmithV. (1996). Social distance and other-regarding behavior in dictator games. American Economic Review, 86, 653-660.
80.
HoffmanE.McCabeK.SmithV. (1998). Behavioral foundations of reciprocity: Experimental economics and evolutionary psychology. Economic Inquiry, 36, 335-352.
81.
JawaharI. M.McLaughlinG. (2001). Towards a descriptive stakeholder theory: An organizational life cycle approach. Academy of Management Review, 26, 397-414.
82.
JensenM. C. (2002). Value maximization, stakeholder theory, and the corporate objective function. Business Ethics Quarterly, 12, 235-256.
83.
JensenM. C.MecklingW. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3, 305-360.
84.
JonesT. (1995). Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20, 404-437.
85.
JonesT.WicksA. (1999). Convergent stakeholder theory. Academy of Management Review, 24, 206-221.
86.
KagelJ.WolfeK. (2001). Tests of fairness models based on equity: Considerations in a three-person ultimatum game. Experimental Economics, 4, 203-219.
87.
KahnemanD.KnetschJ.ThalerR. (1986). Fairness and the assumptions of economics. Journal of Business, 59, 285-300.
88.
KingA. (2007). Cooperation between corporations and environmental groups: A transaction cost perspective. Academy of Management Review, 32, 889-900.
89.
KonovskyM. (2000). Understanding procedural justice and its impact on business organizations. Journal of Management, 26, 489-511.
90.
LawrenceT.WickinsD.PhillipsN. (1997). Managing legitimacy in ecotourism. Tourism Management, 18, 307-316.
91.
LevineD. (1998). Modeling altruism and spitefulness in experiments. Review of Economic Dynamics, 1, 593-622.
92.
MackenzieC. (2004, Autumn). Moral sanctions: Ethical norms as a solution to corporate governance problems. Journal of Corporate Citizenship, 15, 49-61.
93.
MasseyJ. (2001). Managing organizational legitimacy: Communication strategies for organizations in crisis. Journal of Business Communication, 38, 153-183.
94.
McCabeK.RigdonM.SmithV. (2003). Positive reciprocity and intentions in trust games. Journal of Economic Behavior & Organization, 52, 267-275.
95.
McClellandD. C. (1986). Human motivation. New York, NY: Cambridge University Press.
96.
MeyerJ. W.RowanB. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83, 340-363.
97.
MitchellR.AgleB.WoodD. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22, 853-886.
98.
MitnickB. (1995). Systematics of CSR: The theory and processes of normative referencing. Business & Society, 34(1), 5-33.
99.
MitnickB. (2000). Commitment, revelation, and testaments of belief: The metrics of measurement of corporate social performance. Business & Society, 39, 419-465.
100.
NäsiJ. (1995). A scandinavian approach to stakeholder thinking: An analysis of its theoretical and practical use. In NäsiJ. (Ed.), Understanding stakeholder thinking (pp. 97-115). Helsinki, Finland: LSR-Julkaisut Oy.
101.
NeilsenE.RaoH. (1987). The strategy-legitimacy nexus: A thick description. Academy of Management Review, 12, 523-533.
102.
OffermanT. (2002). Hurting hurts more than helping helps. European Economic Review, 46, 1423-1437.
103.
OliverC. (1991). Strategic responses to institutional processes. Academy of Management Review, 16, 145-179.
104.
OliverC. (1996). The institutional embeddedness of economic action. In BaumJ.DuttonJ. (Eds.), Advances in strategic management (Vol. 13, pp. 163-186). Greenwich, CT: JAI Press.
105.
OstromE. (2000). Collective action and the evolution of social norms. Journal of Economic Perspectives, 14, 137-159.
106.
ParmarB. L.FreemanR. E.HarrisonJ. S.WicksA. C.PurnellL.de ColleS. (2010). Stakeholder theory: The state of the art. Academy of Management Annals, 4, 403-445.
107.
PfefferJ.SalancikG. (1978). The external control of organizations: A resource dependence perspective. New York, NY: Harper & Row.
108.
PhillipsR. (1997). Stakeholder theory and a principle of fairness. Business Ethics Quarterly, 7(1), 51-66.
109.
PhillipsR. (2003). Stakeholder theory and organization ethics. San Francisco, CA: Berrett-Koehler.
110.
PowellW. W.DiMaggioP. J. (1991). The new institutionalism in organizational analysis. Chicago, IL: University of Chicago Press.
111.
RabinM. (1993). Incorporating fairness into game theory and economics. American Economic Review, 81, 1281-1302.
112.
RabinM. (1997). Bargaining structure, fairness and efficiency (Working Paper E00-280). Berkeley, CA: Economics Department, University of California.
113.
RaoH. (1994). The social construction of reputation: Certification contests, legitimation, and the survival of the organizations in the american automobile industry: 1895-1912 [Special issue]. Strategic Management Journal, 15, 29-44.
114.
ReinhardtF. (1999). Market failure and the environmental policies of firms. Economic rationales for “beyond compliance” behavior. Journal of Industrial Ecology, 3(1), 9-21.
115.
RiordanC.GatewoodR.BillJ. (1997). Corporate image: Employee reactions and implications for managing corporate social performance. Journal of Business Ethics, 16, 401-412.
116.
RothA. (1995). Introduction to experimental economics. In KagelJ.RothA. (Eds.), The handbook of experimental economics (pp. 3-109). Princeton, NJ: Princeton University Press.
117.
RowleyT. (1997). Moving beyond dyadic ties: A network theory of stakeholder influence. Academy of Management Review, 22, 887-910.
118.
RowleyT.BermanS. (2000). A brand new brand of corporate social performance. Business & Society, 39, 397-418.
119.
RowleyT.MoldoveanuM. (2003). When will stakeholder groups act? An interest- and identity-based model stakeholder group mobilization. Academy of Management Review, 28, 204-219.
120.
SchalteggerS. (1999). Bildung und durchsetzung von interessen zwischen stakeholdern der unternehmung - eine politisch-ökonomische perspektive [The formation and enforcement of interests between stakeholders of the firm—a perspective from political economics]. Die Unternehmung, 53(1), 3-20.
121.
SchotterA.WeissA.ZapatarI. (1996). Fairness and survival in ultimatum and dictatorship games. Journal of Economic Behavior & Organization, 31(1), 37-56.
122.
ScottW. R. (1991). Unpacking institutional arguments. In PowellW.DiMaggioP. (Eds.), The new institutionalism in organizational analysis (pp. 164-182). Chicago, IL: University of Chicago Press.
123.
ScottW. R. (1995). Institutions and organizations. Thousand Oaks, CA: Sage.
SlonimR.RothA. (1998). Learning in high stakes ultimatum games: An experiment in the Slovak Republic. Econometrica, 66, 569-596.
126.
SuchmanM. C. (1995). Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20, 571-610.
127.
SugdenR. (1984). Reciprocity: The supply of public goods through voluntary contributions. Economic Journal, 94, 772-787.
128.
TurbanD.GreeningD. (1997). Corporate social performance and organizational attractiveness to prospective employees. Academy of Management Journal, 40, 658-672.
129.
TurilloC.FolgerR.LavelleJ.UmphressE.GeeJ. (2002). Is virtue its own reward? Self-sacrificial decisions for the sake of fairness. Organizational Behavior and Human Decision Processes, 89, 839-865.
130.
WelcomerS. (2002). Firm-stakeholder networks: Organizational response to external influence and organizational philosophy. Business & Society, 41, 251-257.
131.
WinnM. (2001). Building stakeholder theory with a decision modeling methodology. Business & Society, 40, 133-166.
132.
ZalkaL.DownesM.PaulK. (1997). Measuring consumer sensitivity to corporate social performance across cultures: Which consumers care most?Journal of Global Marketing, 11(1), 29-48.
