Strikes, Free Riders, and Social Customs

Abstract

In recent years there has been a growing literature on the role of social customs in the labour market. Marsden (1986), for example, has emphasised the importance of group norms and social custom in various labour market contexts. Jones (1984) develops an economic model of conformist behaviour in which an individual's work effort is determined partly by tradition and by the behaviour of other workers. A central theme of the literature is that a rational economic agent does not inhabit a social vacuum and hence that individual behaviour is influenced, to some extent, by the actions of others. The approach promises the possibility of an escape from the free-riders problem, which, as we shall investigate, might have a number of labour market applications. Such a potential has been suggested by a number of writers in different fields. Eiser (1978), writing from a socio-psychological perspective, has stressed the role of social norms in producing cooperative outcomes in the theoretical context of the prisoner’s dilemma. Such an emphasis is consistent with Sen's (1977) argument that the concept of commitment might offer a solution to the free rider problems.