nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2005‒07‒25
fourteen papers chosen by
Fabio Sabatini
Universitá degli Studi di Roma, La Sapienza

  1. The Neuroeconomics of Trust By Paul J. Zak
  2. Accessing Formal Credit: Social Capital versus ‘Social Position’ (Lesson from a Javanese Village) By Aloysius Gunadi Brata
  3. Friendship Relations in the School Class and Adult Economic Attainment By Andrea Galeotti; Gerrit Mueller
  4. The Roots of Low European Employment: Family Culture? By Yann Algan; Pierre Cahuc
  5. Interacciones sociales y productivas: una aproximación a la teoría de redes By Julián Piñeres Ramírez
  6. Civil organizations. More politics for less organisation: Aristotle´s social theory By JUAN LUIS MARTINEZ
  7. Networks And Effectiveness In Work Teams: The Impact Of Diversity By JUAN CARLOS PASTOR; MARGARITA MAYO
  8. Fairness, Adverse Selection, and Employment Contracts By von Siemens, Ferdinand
  9. Civil conflict and forced migration: the micro determinantes and the welfare losses of displacement in Colombia By Ana Maria Ibáñez; Carlos Eduardo Vélez
  10. Altruism and charitable giving in a fully replicated economy By Thomas Gaube
  11. Learning, Institutions, and Economic Performance By Chrysostomos Mantzavinos; Douglas C. North; Syed Shariq
  12. Leading by example in a public goods experiment with heterogeneity and incomplete information By M. Vittoria Levati; Matthias Sutter; Eline van der Heijden
  13. Interpreting the Evidence on Life Cycle Skill Formation By Flavio Cunha; James J. Heckman; Lance Lochner; Dimitriy V. Masterov
  14. Mercadeo con causa social: ¿Responsabilidad social o estrategia comercial? By Juan Vianey Gómez Jiménez

  1. By: Paul J. Zak (Claremont Graduate University)
    Abstract: The traditional view in economics is that individuals respond to incentives, but absent strong incentives to the contrary selfishness prevails. Moreover, this “greed is good” approach is deemed “rational” behavior. Nevertheless, in daily interactions and in numerous laboratory studies, a high degree of cooperative behavior prevails—even among strangers. A possible explanation for the substantial amount of “irrational” behavior observed in markets (and elsewhere) is that humans are a highly social species and to an extent value what other humans think of them. This behavior can be termed trustworthiness—cooperating when someone places trust in us. I also analyze the cross-country evidence for environments that produce high or low trust. A number of recent experiments from my lab have demonstrated that the neuroactive hormone oxytocin facilitates trust between strangers, and appears to induce trustworthiness. In rodents, oxytocin has been associated with maternal bonding, pro-social behaviors, and in some species long-term pair bonds, but prior to the work reviewed here, the behavioral effects of oxytocin in humans had not been studied. This presentation discusses the neurobiology of positive social behaviors and how these are facilitated by oxytocin. My experiments show that positive social signals cause oxytocin to be released by the brain, producing an unconscious attachment to a stranger. I also discuss recent research that manipulates oxytocin levels, and functional brain imaging research on trust.
    Keywords: Oxytocin, social capital, neuroeconomics, development, experiments
    JEL: C9
    Date: 2005–07–21
  2. By: Aloysius Gunadi Brata (Research Institute, University of Atma Jaya Yogyakarta)
    Abstract: Low access to formal credit persists in most of developing economies also in Indonesia. Most of households especially in rural areas do not familiar with formal credit. Therefore, formal credit institution needs a mediation or substitution. Recent studies argue that social capital could to a better flow of information between creditors and borrowers and hence less adverse selection and moral hazard in the market for credit. The guarantee of groups and pressure by social network also are important techniques to improve credit performance. The relation between social capital and credit access is an interesting issue since the promotion of formal credit facilities in rural areas is argued as an important policy in reducing poverty level. The aim of this paper is to describe the connection between social capital and access to formal credit, especially from commercial banking in the case of a Javanese village. To describe the connection, this paper will seek what are the different characteristics between household that having access to commercial credit and the other group of households. However, since there is also an argument that social capital does not guarantee poor people to access formal credit, this paper also analyse other important variable namely ‘social position’ of the head of household in their rural community.
    Keywords: social capital, rural credit, formal credit, ‘social position’, Java, Indonesia
    JEL: G
    Date: 2005–07–17
  3. By: Andrea Galeotti (California Institute of Technology and University of Essex); Gerrit Mueller (Erasmus University Rotterdam, Tinbergen Institute and IZA Bonn)
    Abstract: We analyze the impact of adolescents’ friendship relations in their final-year class of high school on subsequent labor market success. Based on a typology of network positions we locate each student within the social system of the school class as either: an isolate, a sycophant, a broker or a receiver. These positions identify individuals’ social standing within the group of classmates and proxy for their interpersonal behavior and social competencies. We offer empirical evidence that differential social standing in adolescence predicts large and persistent earnings disparities over the entire life course. The estimated wage premia and penalties do not appear to be substantially confounded by measures of family and school resources, and materialize largely independent of differences in cognitive abilities, grade rank in class, personality traits or friends’ characteristics. A moderate share of the earnings inequalities is mediated by differential post-secondary human and social capital investment. From a conceptual point of view, we contribute an application of egocentered network methods within conventional labor economic survey research.
    Keywords: friendship ties, social capital, earnings
    JEL: A14 I21 J31
    Date: 2005–07
  4. By: Yann Algan (Université Marne la Vallée, CEPREMAP, OEP and IZA Bonn); Pierre Cahuc (University of Paris 1, CREST-INSEE, CEPR and IZA Bonn)
    Abstract: OECD countries faced largely divergent employment rates during the last decades. But the whole bulk of the cross-national and cross-temporal heterogeneity relies on specific demographic groups: prime-age women and younger and older individuals. This paper argues that family labor supply interactions and cross-country heterogeneity in family culture are key for explaining these stylized facts. First we provide a simple labor supply model in which heterogeneity in family preferences can account for cross-country variations in both the level and the dynamics of employment rates of demographic groups. Second, we provide evidence based on international individual surveys that family attitudes do differ across countries and are largely shaped by national features. We also document that cross-country differences in family culture cause cross-national differences in family attitudes. Studying the correlation between employment rates and family attitudes, we then show that the stronger preferences for family activities in European countries may explain both their lower female employment rate and the fall in the employment rates of young and older people.
    Keywords: employment rate, culture, family attitudes
    JEL: J21 J22 Z13
    Date: 2005–07
  5. By: Julián Piñeres Ramírez
    Abstract: La presente revisión teórica analiza la evolución de los esquemas de interacción entre los individuos y las organizaciones, a partir de los cambios en los contextos económicos y las complejidades del mercado —que se entienden como la especialización de la demanda, el creciente cambio del desarrollo tecnológico, el aumento de las exigencias normativas en los mercados internacionales y las redes globales de distribución, entre otros— y cómo dichos cambios crean la necesidad de plantear estrategias distintas de desarrollo industrial, para lo cual se introduce el concepto de redes que al analizarse a partir de su naturaleza y tipología permite encontrar en los ambientes económicos cuatro formas de interacción entre las organizaciones y los individuos con el propósito de aumentar sus capacidades y por ende su eficiencia y competitividad: redes de cadenas de abastecimiento, conglomerados industriales, redes de emprendimiento y redes de innovación. Por lo tanto, se denota un cambio en los paradigmas organizacionales que hacen cada vez más importante el desarrollo de sinergias en torno a una actividad económica que involucra el conocimiento como factor de desarrollo y la innovación como un proceso constante para mantenerse en el libre juego de la oferta y la demanda.
    Keywords: redes sociales
    JEL: D85
    Date: 2005–09–05
  6. By: JUAN LUIS MARTINEZ (Instituto de Empresa)
    Abstract: There is a lack in analysing Third Sector from a philosophical perspective. It is very complicated to answer many questions that are arising: Why men are concerned to the problems other men are involved in? Which is the driving force of the Social Sector? Why are NGOs legitimated to support social matters? What have NGOs to do in the XIX century? This questions need to be answered to fix correctly future strategy, mission and objectives. It is necessary to build an ethical-political frame to understand how Third Sector works. This paper studies the relationship between NGO and beneficiary, the changes happened in the XX century and the challenges NGO need to face in the forthcoming years.
    Keywords: Non Profit Organisations, Third Sector, Ethics, Ethical-political focus, Relationship, Liberty
    Date: 2004–11
  7. By: JUAN CARLOS PASTOR (Instituto de Empresa); MARGARITA MAYO (Instituto de Empresa)
    Abstract: This paper examine the role of social networks as mediating factors in the relationship between diversity and work team effectiveness. These effects were tested with a sample of 71 organizational teams. Results show that the degree of diversity in a team influences the density and centralization of the communication network. In turn, network density and centralization affect work team outcomes. Results are discussed in terms of their theoretical significance for network and diversity theory.
    Date: 2005–02
  8. By: von Siemens, Ferdinand
    Abstract: This paper considers a firm whose potential employees have private information on both their productivity and the extent of their fairness concerns. Fairness is modelled as inequity aversion, where fair-minded workers suffer if their colleagues get more income net of production costs. Screening workers with equal productivity but different fairness concerns is shown to be impossible if both types are to be employed, thereby rendering the optimal employment contracts discontinuous in the fraction of fair-minded workers. As a result, fairness might infuence the employment contracts of all workers although only some are fair-minded, and identical firms facing very similar pools of workers might employ very different remuneration schemes.
    JEL: J31 D82 D63 D42 D21 C70
    Date: 2005–07
  9. By: Ana Maria Ibáñez; Carlos Eduardo Vélez
    Abstract: During the last decade, forced internal displacement in Colombia has been a growing phenomenon closely linked to the escalation of the internal armed conflict - particularly in rural areas. The displacement problem has affected nearly every region and vulnerable groups of the population. Two emerging policy questions are whether the magnitude of the response to this problem has been proportional to its size and to what extent the instruments chosen are the most adequate to address it. The purpose of this paper is twofold. First, to identify the determinants of displacement behavior and to compare these findings with standard migration literature. Second, to estimate the burden or welfare losses of displacement. Empirical evidence shows that the welfare loss of displacement is considerable and amount to 37 percent of the net present value of rural lifetime aggregate consumption for the average household. This loss is estimated for each household with a method that derives welfare changes from behavioral model estimates – widely used in environmental economics. Our empirical findings also show that the level of violence at the origin site is not only the dominant factor of displacement behavior, but also that in a violent environment other migration determinants have the opposite effect, relative to the one expected by the migration literature in a non-violent context. That is, the violent environment modifies the migration incentives for risk aversion, access to information, the planning horizon, and location-specific assets – human and non-human.
    Keywords: Forced displacement
    JEL: C35
    Date: 2005–05–25
  10. By: Thomas Gaube (Max Planck Institute for Research on Collective Goods, Bonn, Germany)
    Abstract: In this paper, an economy is analyzed where one group of agents, the altruists, cares about the well-being of another group of agents, the recipients. It is asked how changes in the size of these groups affect the altruists’ charitable giving in the Nash equilibrium. I show that a pure group size effect, i.e., a proportional expansion of both subgroups can lead to less free riding and to a lower degree of underprovision relative to the efficient level of charitable giving.
    Keywords: altruism, public goods, group size, charitable giving
    JEL: D64 H41
    Date: 2005–04
  11. By: Chrysostomos Mantzavinos (Faculty of Economics and Business, Witten/Herdecke University); Douglas C. North (Washington University, St. Louis); Syed Shariq (Institute for International Studies, Stanford University)
    Abstract: In this article, we provide a broad overview of the interplay among cognition, belief systems, and institutions, and how they affect economic performance. We argue that a deeper understanding of institutions’ emergence, their working properties, and their effect on economic and political outcomes should begin from an analysis of cognitive processes. We explore the nature of individual and collective learning, stressing that the issue is not whether agents are perfectly or boundedly rational, but rather how human beings actually reason and choose, individually and in collective settings. We then tie the processes of learning to institutional analysis, providing arguments in favor of what can be characterized as “cognitive institutionalism.” Besides, we show that a full treatment of the phenomenon of path dependence should start at the cognitive level, proceed at the institutional level, and culminate at the economic level.
    Date: 2003–12
  12. By: M. Vittoria Levati; Matthias Sutter; Eline van der Heijden
    Abstract: We study the effects of leadership on the private provision of a public good when group members are heterogeneously endowed. Leadership is implemented as a sequential public goods game where one group member contributes first and all the others follow. Our results show that the presence of a leader increases average contribution levels, but less so than in case of homogeneous endowments. Leadership is almost ineffective, though, if subjects do not know the distribution of endowments. Granting the leaders exclusion power does not lead to significantly higher contributions.
    Keywords: public goods experiment, leadership, exclusion, heterogeneous endowments, incomplete information
    JEL: C72 C92 H41
    Date: 2005–07
  13. By: Flavio Cunha (University of Chicago); James J. Heckman (University of Chicago, University College London, American Bar Foundation and IZA Bonn); Lance Lochner (University of Western Ontario); Dimitriy V. Masterov (University of Chicago)
    Abstract: This paper presents economic models of child development that capture the essence of recent findings from the empirical literature on skill formation. The goal of this essay is to provide a theoretical framework for interpreting the evidence from a vast empirical literature, for guiding the next generation of empirical studies, and for formulating policy. Central to our analysis is the concept that childhood has more than one stage. We formalize the concepts of self-productivity and complementarity of human capital investments and use them to explain the evidence on skill formation. Together, they explain why skill begets skill through a multiplier process. Skill formation is a life cycle process. It starts in the womb and goes on throughout life. Families play a role in this process that is far more important than the role of schools. There are multiple skills and multiple abilities that are important for adult success. Abilities are both inherited and created, and the traditional debate about nature versus nurture is scientifically obsolete. Human capital investment exhibits both self-productivity and complementarity. Skill attainment at one stage of the life cycle raises skill attainment at later stages of the life cycle (self-productivity). Early investment facilitates the productivity of later investment (complementarity). Early investments are not productive if they are not followed up by later investments (another aspect of complementarity). This complementarity explains why there is no equity-efficiency trade-off for early investment. The returns to investing early in the life cycle are high. Remediation of inadequate early investments is difficult and very costly as a consequence of both self-productivity and complementarity.
    Keywords: skill formation, education, government policy, educational finance
    JEL: J31 I21 I22 I28
    Date: 2005–07
  14. By: Juan Vianey Gómez Jiménez
    Abstract: La necesidad de ser competitivos ha llevado a la gerencia de las empresas a buscar diferentes formas o alternativas de alcanzar la diferenciación de sus productos y servicios. Atendiendo a las actuales tendencias, las decisiones de diferenciación han estado basadas en lo que los clientes y ciudadanos consideran importante. Estos, frente a los continuos cambios económicos y sociales al igual que ante la continua presencia de desastres naturales y infermedades de difícil cura, han evolucionado en su forma de pensar y han sentido la necesidad de ser solidarios y copartícipes en la solución de los variados problemas que afectan a la población mundial, en especial a la población con menos recursos. Junto a este sentir, ha evolucionado la creencia de que las empresas son responsables de algunas de las situaciones que afectan a la comunidad y que su función debería ir por tanto más allá de la generación de empleo y la elaboración de productos de buena calidad, papel que la empresa debiera atender desde unos objetivos institucionales claros, explícitos e integrados en su misión y no a través de campañas de mercadeo hacia lo social que buscan «responder» al sentimiento de solidaridad de las personas y que finalmente, generan hacia la empresa fidelidad de los clientes y aumento de las ventas, pero que dejan a la comunidad sin verdaderas soluciones que la eduquen para el desarrollo.
    Keywords: acción social
    JEL: M14
    Date: 2005–09–05

This nep-soc issue is ©2005 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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