Raymond Fisman An economists view of cultural change Economics of culture Culture according to economists Tells us how to behave when we cant turn to a formal contract or set of rules for guidancepart conscience, part commitment, part coordination. On the conscience of an average economist: culture is just about trigger strategies. 2 Economics of culture Culture as commitment We cant write a perfect contract to describe our obligations to an organization Informal agreements fill in the gaps Where does our knowledge of informal agreements come from? The definition of almost Costly decisions and almost going off the rails 3 Economics of culture Culture as coordination 4 Kiss, bow, or The high cost of changing norms Merging memo and meeting cultures Economics of culture Culture and communication in the lab (Camerer and Weber) Subjects communicate via IM Paid based on rapidity with which one subject (manager) can get another subject (employee) to identify a sequence of pictures Part II: After a number of rounds, new employee is added, and manager must get both employees to identify pictures 5 Economics of culture Culture and communication in the lab (Camerer and Weber) 6 Uday Rao, Cubeville, Lady with typewriter Flowers in back, Macarena, Cupboard in back Economics of culture Merging cultures in the lab harder than we thought (Camerer & Weber) Subjects overestimate speed of merged firm Average actual time: 86s Average estimated time: 69s (p < 0.02) New and old subjects blame each other for failed communication 7 Economics of culture Reforming a culture of corruption Super-citizen Mockus Economics of culture Changing culture in Bogota Economics of culture Changing the culture of Bogota Public acts (rather than private enforcement) helped to reinforce the change in norms Participatory elements helped citizens signal their own commitment to new norms (and sanction those who didnt) 10 Economics of culture Economics, culture, and cultural change Organizational economists are taking a more sophisticated, less under-socialized view of culture Early work helps document the challenges to changing/merging cultures: Hopefully well have more to say next time on what to do about it 11