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on Social Norms and Social Capital |
| By: | Nejat Anbarci (Department of Economics, Florida International University); Jonathan Hill (Department of Economics, Florida International University); Hasan Kirmanoglu (Department of Economics, Bilkin University) |
| Abstract: | Growth volatility is a major factor that retards growth. Recent studies that link democracy and volatility can not account for a link between democracy and investment volatility. Here, instead, we focus on a specific channel that links individualistism and low volatility. Unlike an individualistic society, in a collectivistic society agents choose to invest together or choose not to invest together. We construct a two-equation system of investment and income growth volatility. We find individualism significantly directly and indirectly influences volatility negatively. We also find that, unlike individualism, democracy’s influence on investment depends on the measure of democracy and econometric specification used. |
| Keywords: | Growth volatility, investment volatility, democracy, individualism/collectivism |
| JEL: | E32 O10 P16 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:0508&r=soc |
| By: | Charles Bellemare; Sabine Kroger; Arthur van Soest |
| Abstract: | We combine the choice data of proposers and responders in the ultimatum game, their expectations elicited in the form of subjective probability questions, and the choice data of proposers ("dictators") in a dictator game to estimate a structural model of decision making under uncertainty. We use a large and representative sample of subjects drawn from the Dutch population. Our results indicate that there is considerable heterogeneity in preferences for equity in the population. Changes in preferences have an important impact on decisions of dictators in the dictator game and responders in the ultimatum game, but a smaller impact on decisions of proposers in the ultimatum game, a result due to proposer's subjective expectations about resopnders' decisions. The model which uses subjective data on expectations has better predictive power and lower noise level than a model which assumes that players have rational expectations. |
| Keywords: | Ultimatum game, inequity aversion, subjective expectations |
| JEL: | C93 D63 D84 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0523&r=soc |