A study by Gianmario Verona of Sda Bocconi and co-authors shows that social norms are an imperfect substitute for intellectual property rights. Their effectiveness is limited when the offender has a good reputation or the offense is minor, and the perception of an inherent cost in the administration of sanctions can prevent the circulation of knowledge.
Social standards are seen as an effective substitute for intellectual property rights in sectors where innovation is important, but protection is absent or difficult to enforce. Haute couture, academia, live entertainment and software are clear examples. An important contribution to understanding how social sanctions work comes from a paper by Gianmario Verona (Department of Management and Technology) of Sda Bocconi), Giada Di Stefano (HEC Paris) and Andrew King (Dartmouth College) on haute cuisine: Sanctioning in the Wild: Rational Calculus and Retributive Instincts in Gourmet Cuisine (Academy of Management Journal, 2015, Vol. 58, No. 3, 906-931, doi:10.5465/amj.2012.1192).
According to the study, social sanctions seem to work in decidedly unexpected ways, divided into an exploratory phase of a qualitative type (23 individual interviews with great chefs), which served to outline the reasons that lead to administering a sanction, and an experimental verification phase of the consequent hypotheses, conducted through the administration of questionnaires based on scenarios to all Italian chefs in the Michelin Guide (with 534 questionnaires returned).
The exchange of knowledge between chefs is governed by well-defined social norms. When a chef transfers information about a recipe or preparation technique to a colleague, three social commandments apply: the colleague (1) will not slavishly copy the recipe or preparation technique, but will use it as a source of inspiration to create something new; (2) if he copies it he will slavishly mention the source of inspiration for the recipe, including the name of the inspiring chef in his menu; and (3) will not pass the obtained information on to any third party without first seeking permission from the original chef. “Industry norms,” the authors write, “help encourage exchanges by regulating when and how chefs can use transferred knowledge. These rules provide a sort of 'mental copyright' that encourages innovation and exchange”.
When a violation nevertheless occurs, three types of sanctions are commonly imposed: (1) denial of future transfers of knowledge; (2) refusal to share material exchanges, such as in the case of a need for missing ingredients or personnel; (3) the circulation of negative gossip in the professional community.
Verona and colleagues however observe that a violation is not automatically followed by a sanction. Usually chefs decide whether to sanction through a rational calculation, because the sanction has a social cost, and some offenders have a better chance of getting away with it. According to the theory, the community should approve the sanction in case of violation of social norms, but in reality (the "in the wild" of the title of the article) the chefs believe that the community's response constitutes the main social cost: there are good possibility that other chefs will interpret the sanction itself as a violation and not as a means to restore social order. The offender's reputation is the characteristic that most influences the propensity to sanction: when the offender is a chef with a good reputation, the propensity to sanction decreases by 17,2%.
Competition (understood as proximity of premises) is another important consideration and offenders closest to you are 18,4% more likely to be fined. However, rationality can be set aside in the event of serious violations. “We have observed instances where chefs seemed to completely forget about rational calculation and flew into a rage over the violation. Serious violations appear to trigger an emotional reaction,” write the authors. The most instinctive reactions are recorded in cases of violations concerning recipes, in particular those of the dishes that most characterize a chef (the so-called 'signature dishes'), compared to violations concerning preparation techniques, which are more "invisible" in the eyes of customers and critics.
An unexpected and perverse consequence of the perceived cost of sanctioning is the limitation on the circulation of knowledge. If chefs perceive that a transfer of knowledge is likely to result in a violation that they will need to sanction, they prefer to avoid the transfer altogether, to avoid incurring the social cost associated with administering the sanction. The results of the experiment show an 18,2% decrease in the propensity to transfer knowledge when the propensity to sanction is above the median level.
