nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2005‒10‒29
seventeen papers chosen by
Fabio Sabatini
Universitá degli Studi di Roma, La Sapienza

  1. Is it trust we model? An attempt to calculate the non-calculative By Stephanie Rosenkranz; Utz Weitzel
  2. Social Networking and Individual Outcomes Beyond the Mean Field Case By Yannis M. Ioannides; Adriaan R. Soetevent
  3. Ambiguity and Social Interaction By Jürgen Eichberger; David Kelsey; Burkhard C. Schipper
  4. The Protestant Work Ethic and Group Performance By Abele, S.; Diehl, M.
  5. The Relevance of Procedural Utility for Economics By Matthias Benz
  6. Organised Crime, Corruption and Punishment By Kugler, Maurice; Verdier, Thierry; Zenou, Yves
  7. Corruption and Political Competition By Richard Damania; Erkan Yalcin
  8. The Role of Equality and Efficiency in Social Preferences By Ernst Fehr; Michael Naef; Klaus M. Schmidt
  9. Fairness, Adverse Selection, and Employment Contracts By Ferdinand von Siemens
  10. Fairness and the Optimal Allocation of Ownership Rights By Ernst Fehr; Susanne Kremhelmer; Klaus M. Schmidt
  11. The role of personal involvement and responsibility in dictatorial allocations: a classroom investigation By Pablo Brañas-Garza; Miguel Angel Durán; María Paz Espinosa
  12. Workgroup Gender Diversity and Charismatic Leadership: Asymmetric Effects Among Men and Women By JUAN CARLOS PASTOR; MARGARITA MAYO
  13. Courtesy and Idleness: Gender Differences in Team Work and Team Competition By Radosveta Ivanova-Stenzel; Dorothea Kübler
  14. The Tsunami?s CSR Effect: MNEs and Philanthropic Responses to the Disaster By Whiteman, G.
  15. Job Insecurity and Youth Emancipation: A Theoretical Approach By Sascha O. Becker; Samuel Bentolila; Ana Fernandes; Andrea Ichino
  16. "Soft" Skills, "Hard" Skills, and the Black/White Earnings Gap By C. Simon Fan; Xiangdong Wei; Junsen Zhang
  17. Organization and Strategy of Farmer Specialized Cooperatives in China By Hu, Y.; Huang, Z.; Hendrikse, G.W.J.; Xu, X.

  1. By: Stephanie Rosenkranz; Utz Weitzel
    Abstract: In this paper we characterize a situation in which non-calculative trust has to play a role in the decision to cooperate. We then analyze the given situation in game theoretical terms and distinguish those aspects of players' decisions that are cooperative from those that may be interpreted as being trustful. We argue that the cooperative aspect relates to incentives while the trustful (and thus non-calculative) aspect of the decision is related to the framing of the situation.
    Keywords: trust, framing, focal points, alliances, cooperation
    JEL: C72 D80 D74 Z13
    Date: 2005–04
  2. By: Yannis M. Ioannides; Adriaan R. Soetevent
    Abstract: This paper examines social interactions when social networking is endogenous. It employs a linear-quadratic model that accommodates contextual effects, and endogenous local inter- actions, that is where individuals react to the decisions of their neighbors, and endogenous global ones, where individuals react to the mean decision in the economy, both with a lag. Unlike the simple V AR(1) structural model of individual interactions, the planner's problem here involves intertemporal optimization and leads to a system of linear difference equations with expectations. It highlights an asset-like property of socially optimal outcomes in every period which helps characterize the shadow values of connections among agents. Endogenous networking is easiest to characterize when individuals choose weights of social attachment to other agents. It highlights a simultaneity between decisions and patterns of social at- tachment. The paper also poses the inverse social interactions problem, asking whether it is possible to design a social network whose agents' decisions will obey an arbitrarily specified variance covariance matrix.
    Keywords: Social Interactions, Social Networks, Neighborhood Effects, Endogenous Net- working, Social Intermediation, Econometric Identification, Strong versus Weak Ties, Value of Social Connections.
    JEL: D85 A14 J0
    Date: 2005
  3. By: Jürgen Eichberger (Alfred Weber Institut, Universität Heidelberg.); David Kelsey (Department of Economics, University of Exeter); Burkhard C. Schipper (Department of Economics, University of Bonn & University of California, Davis, address: Department of Economics, University of California, Davis, One Shields Avenue, Davis, CA 95616, USA,
    Abstract: We present a non-technical account of ambiguity in strategic games and show how it may be applied to economics and social sciences. Optimistic and pessimistic responses to ambiguity are formally modelled. We show that pessimism has the effect of increasing (decreasing) equilibrium prices under Cournot (Bertrand) competition. In addition the effects of ambiguity on peace-making are examined. It is shown that ambiguity may select equilibria in coordination games with multiple equilibria. Some comparative statics results are derived for the impact of ambiguity in games with strategic complements.
    Keywords: Ambiguity, Optimism, Pessimism, Strategic Games, Oligopoly, Strategic Delegation, Peace-making, Strategic Complements, Choquet Expected Utility
    JEL: C72 D43 D62 D81
    Date: 2005–07
  4. By: Abele, S.; Diehl, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This study examines the contribution of a personality variable in motivation losses in group performance. Differences in the endorsement of the ?Protestant Work Ethic? can account for variance in motivation losses in group work. Male student scores on the Mirels- Garrett Protestant Work Ethic Scale and Ho?s Australian Work Ethic Scale as well as different preferences for reward distributions were used as moderator variables. The study tested motivation losses in a situation that was designed to provoke the free-rider effect and in a situation that was designed to provoke the sucker-effect. Results showed that different facets of the Protestant Work Ethic have different effects on behavior in group work situations: Whereas approval of the equity principle moderates the sucker-effect, belief in work as a value moderates the free-rider effect.
    Keywords: Group-productivity;Motivation-losses;Protestant Work Ethic;
    Date: 2005–10–14
  5. By: Matthias Benz
    Abstract: This paper aims at showing the relevance of procedural utility for economics: people do not only care about outcomes, as usually assumed in economics, they also value the processes and conditions leading to outcomes. The psychological foundations of procedural utility are outlined and it is discussed how the concept differs from other related approaches in economics, like outcome utility, outcome fairness or intentions. Institutions at the level of society and fair procedures are shown to be sources of procedural utility, and novel empirical evidence on the role of procedural utility in important areas of the economy, polity and society is presented.
    Keywords: procedural utility, outcome utility, institutions, procedural fairness, outcome fairness, intentions
    JEL: C78
    Date: 2005–10
  6. By: Kugler, Maurice; Verdier, Thierry; Zenou, Yves
    Abstract: We analyse an oligopoly model in which differentiated criminal organisations globally compete on criminal activities and engage in local corruption to avoid punishment. When law enforcers are sufficiently well-paid, difficult to bribe and corruption detection highly probable, we show that increasing policing, or sanctions, effectively deters crime. However, when bribing costs are low, that is badly-paid and dishonest law enforcers work in a weak governance environment, and the rents from criminal activity relative to legal activity are sufficiently high, we find that increasing policing and sanctions can generate higher crime rates. In particular, the relationship between the traditional instruments of deterrence, namely intensification of policing and sanctions, and the crime rate is nonmonotonic. Beyond a threshold, further increases in intended expected punishment create incentives for organised crime extending corruption rings, and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime. JEL Classification: K42, L13, O17.
    Keywords: Intended deterrence, organised crime, weak governance, corruption.
    Date: 2004–05–01
  7. By: Richard Damania (Adelaide University); Erkan Yalcin (Yeditepe University)
    Abstract: There is a growing evidence that political corruption is often closely associated with the rent seeking activities of special interest groups. This paper examines the nature of the interaction between the lobbying activities of special interest groups and the incidence of political corruption and determines whether electoral competition can eliminate political corruption. We obtain some striking results. Greater electoral competition serves to lessen policy distortions. However, this in turn stimulates more intense lobbying which increases the scope of corrupt behavior. It is shown that electoral competition merely serves to alter the type of corruption that eventuates, but cannot eliminate it.
    Keywords: Corruption, Lobbying, Political Competition
    JEL: D72
    Date: 2005–10–24
  8. By: Ernst Fehr (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Michael Naef (Institute for Empirical Research in Economics, University of Zurich, Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Klaus M. Schmidt (Department of Economics, University of Munich, Ludwigstr. 28, D-80539 Muenchen, Germany)
    Abstract: Engelmann and Strobel (AER 2004) claim that a combination of efficiency seeking and minmax preferences dominates inequity aversion in simple dictator games. This result relies on a strong subject pool effect. The participants of their experiments were undergraduate students of economics and business administration who self-selected into their field of study and learned early on that efficiency is desirable. We show that for non-economists the preference for efficiency is much less pronounced. We also find a gender effect indicating that women are more egalitarian than men. However, perhaps surprisingly, the dominance of equality over efficiency is unrelated to political attitudes.
    Keywords: Social Preferences, Inequity Aversion, Efficiency Preferences
    JEL: C7 C91 C92 D63 D64
    Date: 2004–10
  9. By: Ferdinand von Siemens (University of Munich,
    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 influence 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.
    Keywords: Fairness, Employment Contracts, Adverse Selection, Screening, Heterogeneity in Organizational Form
    JEL: C70 D21 D42 D63 D82 J31
    Date: 2005–07
  10. By: Ernst Fehr (Institute for Empirical Research in Economics, University of Zurich (CESifo and CEPR), Bluemlisalpstrasse 10, CH-8006 Zurich, Switzerland); Susanne Kremhelmer (Department of Economics, University of Munich, Ludwigstr. 28, D-80539 Muenchen, Germany); Klaus M. Schmidt (Department of Economics, University of Munich (CESifo and CEPR), Ludwigstr. 28, D-80539 Muenchen, Germany)
    Abstract: We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that the subjects achieve the most efficient ownership allocation starting from different initial conditions. However, in contrast to the property rights approach, the most efficient ownership structure is joint ownership. These results are neither consistent with the self-interest model nor with models that assume that all people behave fairly, but they can be explained by the theory of inequity aversion that focuses on the interaction between selfish and fair players.
    Keywords: Ownership Rights, Double Moral Hazard, Fairness, Reciprocity, Incomplete Contracts
    JEL: C7 C9 J3
    Date: 2004–07
  11. By: Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada); Miguel Angel Durán (Department of Economic Theory and Economic History, University of Granada); María Paz Espinosa (Universidad del País Vasco)
    Abstract: This paper explores new motivations behind giving. Specifically, it focuses on personal involvement and responsibility to explain why decision makers give positive amounts in dictatorial decisons. The experiment is designed to uncover these motivations. Subjects face the problem of a dictator's allocation of an indivisible pie P to one of two players; indivisibility creates an extremely unequal outcome and the dictator is given a chance to correct this outcome at a cost. The willingness to pay to correct the outcome is examined under different scenarios so that we learn about several features concerning preferences.
    Keywords: Fairness, Dictator game, Moral cost.
    JEL: C91 D63 D64
    Date: 2005–10–17
  12. By: JUAN CARLOS PASTOR (Instituto de Empresa); MARGARITA MAYO (Instituto de Empresa)
    Abstract: A laboratory study was conducted to examine how gender team diversity influences men and women´s charismatic relationships with an elected group leader. We examined individuals´ charismatic relationships with their leaders when working in groups varying in gender composition. Results supported the argument that gender diversity provides a context that facilitates the emergence of charismatic leadership. Furthermore, the effect of gender diversity on charismatic relationships is asymmetric, being more marked in the case of men than that of women. Our results question the similarity-attraction hypothesis and contribute to the incipient follower-centric approach to leadership.
    Keywords: Diversity, Leadership
    Date: 2005–10
  13. By: Radosveta Ivanova-Stenzel; Dorothea Kübler
    Abstract: Does gender play a role in the context of team work? Our results based on a real-effort experiment suggest that performance depends on the composition of the team. We find that female and male performance differ most in mixed teams with revenue sharing between the team members, as men put in significantly more effort than women. The data also indicate that women perform best when competing in pure female teams against male teams whereas men perform best when women are present or in a competitive environment.
    Keywords: team incentives, gender, tournaments
    JEL: C72 C73 C91 D82
    Date: 2005–09
  14. By: Whiteman, G. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper contributes to the literature on CSR and International Business by linking firm internationalization to corporate philanthropy. Considering the 2004 Tsunami disaster as a highly relevant case of an international societal issue, we analyze the characteristics of the corporate response to the disaster among Fortune Global 500 firms. We find that home region, degree of internationalization, firm size and profitability most strongly influenced the propensity of firms to donate as well as the value of their donations.
    Keywords: CSR, Internationalization;Philanthropy;Tsunami;
    Date: 2005–10–18
  15. By: Sascha O. Becker; Samuel Bentolila; Ana Fernandes; Andrea Ichino
    Abstract: In this paper, we propose a theoretical model to study the effect of income insecurity of parents and offspring on the child's residential choice. Parents are partially altruistic toward their children and will provide financial help to an independent child when her income is low relative to the parents'. We show that first-order stochastic dominance (FOSD) shifts in the distribution of the child's future income (or her parents') will have ambiguous effects on the child's residential choice. The analysis identifies altruism as the source of ambiguity in the results. If parents are selfish or the joint income distribution of parents and child places no mass on the region where transfers are provided, a FOSD shift in the distribution of the child's (parents') future income will reduce (raise) the child's current income threshold for independence
    Keywords: Altruism; Emancipation; Job security; Option value
    JEL: D1 J1 J2
    Date: 2005–10
  16. By: C. Simon Fan (Lingnan University, Hong Kong); Xiangdong Wei (Lingnan University, Hong Kong); Junsen Zhang (Chinese University of Hong Kong and IZA Bonn)
    Abstract: This paper provides both a theoretical and an empirical investigation into the impact of job skill types on the black/white pay differentials. The theoretical analysis derives that the more intensively "soft"/"hard" skills are used in an occupation, the greater/smaller the black/white pay differential is there in that occupation. Moreover, in response to the differential pay gaps across jobs requiring different levels of "soft"/"hard" skills, blacks are more likely to self-select themselves into the jobs that use "hard" skills more intensively, ceteris paribus. Using NLSY data, we find consistent empirical evidence to our theoretical predictions. Hence, the paper bridges the existing literature on racial pay gaps and cognitive vs. non-cognitive skills by explicitly testing the impact of job skill types on racial pay gaps.
    Keywords: soft skills, hard skills, discrimination, pay differentials
    JEL: J24 J31 J71
    Date: 2005–10
  17. By: Hu, Y.; Huang, Z.; Hendrikse, G.W.J.; Xu, X. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: A description and analysis of China?s Farmer Specialized Cooperatives is presented. Data is presented regarding the historical development of farmer cooperatives in China, the membership composition of a sample of 66 farmer cooperatives in the Zhejiang province, and the various attributes (governance, quality control system, and strategy) of a watermelon cooperative in this province. Many cooperatives are being transformed in organizations with a market orientation. These cooperatives exhibit substantial heterogeneity, in terms of farmers being member and skewness in the distribution of control rights. Human asset specificity in terms of establishing and maintaining relations and access to markets seems to be more important than physical asset specificity in accounting for governance structure choice in the current institutional setting.
    Keywords: Farmer Cooperative;China;Governance;
    Date: 2005–10–18

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