The elements of the institutional mechanism of economic agents' social responsibility

Today's socially-oriented market economy produced a special institutional mechanism that enables to comprise the principles of economic benefits of a market system and values of the national well-being. Taking into account the features of the institutions and modalities of its implementation, the institutional mechanism within the system of social responsibility should be seen as a systemic unity of three interdependent elements: 1. The mechanism of internalization of social responsibility norms that includes a wide-ranging set of methods aimed at promoting cooperation and communication. Communication mechanisms ensure the transfer of experience and dissemination of information on effective business practices, as well as shape views and routines of economic entities. Communication mechanisms of economic entities, primarily, designed for direct interaction, create real barriers for opportunistic behavior. Mechanisms of cooperation, especially, mechanisms of reciprocity are also an integral component of the mechanism of internalization of social responsibility. Mechanisms of reciprocity include: • Direct reciprocity. It ensures cooperation between unrelated autonomous economic entities. They are based on mutual expectations of prospective cooperative behavior. • Indirect reciprocity provides for cooperative behavior emerging in relationships with a particular entity due to expectations that other partners will also behave cooperatively in the future. • Strict reciprocity - altruistic punishment. Apart from entities interested in obtaining a specific result, third parties that advocate the norm of social responsibility in case of its violation are also expected to participate in a sanctions mechanism, even if an individual, in respect of which this norm is broken, is not aware of it. 2. Mechanisms to promote prosocial behavior complement the mechanisms of internalization of the social responsibility norm, allowing to put the stability of the institution to the test, and to assess the level of efficiency of its implementation in the everyday activities of economic entities. Stimulation of prosocial behavior based on the mechanisms of sanctions, compensations, and the demonstration of cooperation effectiveness. 3. The mechanism for promoting, adapting and transforming the norm of social responsibility is based primarily on the reputation mechanisms and institutional design. Reputation mechanisms are a part of the indirect reciprocity mechanisms, since they organize the interaction of individuals who have no experience of joint activities, so they do not possess sufficient information about each other. Reputation is associated with other elements of the institutional mechanism of social responsibility, including the sanctions mechanism. While sanctions mechanisms suffer from low efficiency, reputation mechanisms enable to fill the vacuum of coordination. Thus, reputational and sanctions mechanisms complement each other and create an environment that does not require frequent use of expensive coercive measures. Eventually, it necessary to emphasize the fact that strong interrelation and interdependence of the elements of the institutional mechanism of social responsibility, which due to their diversity, provide sustainability and integrity to the system of social responsibility, ensure orderliness of the system elements, coordination of interests of economic entities, contribute to the resolution of social dilemmas within the current economic system.

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