Several recent commentators have suggested that for fully rational agents who find themselves in iterated prisoner's dilemmas of indefinite length, co-operation is the rational strategy. Their argument is that these fully rational agents can be taught, through the co-operative actions of other agents, to bypass the dominant move of noncooperation and co-operate instead. The proponents of the “teaching strategy” seem to have ignored the compelling argument of Jordan Howard Sobel. While the teaching argument may work for agents who are less (...) than purely rational, Sobel has pointed out that hyperrational utility maximizers cannot be taught; they reason deductively, not inductively, as the “teaching argument” requires. (shrink)

L'histoire de la philosophie est marquée par de nombreuses tentatives pour soustraire la morale aux préceptes dictés par une croyance religieuse aveugle, l'arracher aux limbes des émotions, des intérêts égoïstes, des «nobles» sentiments ou des passions troubles de la volonté de puissance, la sortir du terrain où se disputent âprement les évidences intuitives, l'inscrire dans le règne de la raison. Il s'agit de tentatives en vue de fonder les obligations morales, l'éthique tout court, de manière rationnelle. Or, ces démarches peuvent (...) emprunter des chemins variables selon que la rationalité de l'action se trouve conceptualisée dans la perspective des intérêts et préférences raisonnés, ou qu'elle se comprend à partir de la raison pratique dans sa pureté. (shrink)

The use of agency theory remains highly controversial among business ethicists. While some regard it as an essential tool for analyzing and understanding the recent spate of corporate ethics scandals, others argue that these scandals might not even have occurred had it not been for the widespread teaching of agency theory in business schools. This paper presents a qualified defense of agency theory against these charges, first by identifying the theoretical commitments that are essential to the theory (in order to (...) distinguish between agency theory itself and certain incorrect interpretations that have been widely promulgated), and second, by specifying more clearly the different ways that agency theory can be used to analyze relations within the firm. The recommendation that follows from this analysis is that agency theory be used as a critical-diagnostic tool, to identify the points at which both firms and markets will be vulnerable to breakdown in the absence of moral constraint. (shrink)

Chester Barnard's classic, The Functions of the Executive, is premised on an Aristotelean conception of human nature. This reliance ramifies throughout his analysis of the cooperative basis of human organizations. Perhaps its most important manifestation appears in his definition of willing cooperation as self-abnegation. For by so removing cooperation from its utilitarian and contractarian assumptions, he avoids the well known criticisms of those assumptions while retaining his fundamental liberalism. Put positively, self-abnegation informs Barnard's liberalism with an heroic dimension. This, in (...) turn, enables him to provide an account of organizational effectiveness which is at once realistic and optimistic and which values its unique human participants. (shrink)

ABSTRACT:Some business ethicists view agency theory as a cautionary tale—a proof that it is impossible to carry out successful economic interactions in the absence of ethical behaviour. The cautionary-tale view presents a nuanced normative characterisation of agency, but itsunilateralfocus betrays a limited understanding of the structure of social interaction. This article moves beyond unilateralism by presenting a descriptive and normative argument for abilateralcautionary-tale view. Specifically, we discuss hat swaps and role dualism in asymmetric-information principal-agent relationships and argue that the norm (...) of reciprocity can function as a moral solution to agency risks in adverse-selection and moral-hazard problems. Our bilateral cautionary-tale formulation extends the normative boundaries of agency theory, while leaving the fundamental economic assumptions of agency theory intact. (shrink)