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on Social Norms and Social Capital |
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Issue of 2006‒08‒26
eighteen papers chosen by Fabio Sabatini Universita degli Studi di Roma, La Sapienza |
| By: | YANNIS M. IOANNIDES (tufts university); Adriaan R. Soetevent (University of Amsterdam and Tinbergen Institute) |
| Abstract: | This paper examines social interactions when social networking is endogenous. It employs a linear-quadratic model that accommodates contextual e®ects, 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 di®erence 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 speci¯ed variance covariance matrix. |
| JEL: | D85 A14 J0 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0516&r=soc |
| By: | Michele Mosca (University of Naples "Federico II"); Marco Musella (University of Naples "Federico II"); Francesco Pastore (Seconda Università di Napoli and IZA Bonn) |
| Abstract: | This paper investigates the nonprofit wage gap suggesting a theoretical framework where, like in Akerlof (1984), effort correlates not only with wages, but also with non-monetary compensations. These take the form of relational goods and services by-produced in the delivery of particular services. By paying higher non-pecuniary compensations, the nonprofit sector attracts intrinsically similarly skilled, but more motivated workers, able to provide in fact a higher level of effort than their counterparts in the forprofit sector. On an empirical ground, the paper provides a number of econometric tests that confirm the main predictions of the model in Italy’s case. It adds to the available empirical literature by introducing in the analysis direct measures of non-pecuniary compensations and job satisfaction. |
| Keywords: | relational goods, job satisfaction, wage determination, non-profit organisations, efficiency wages |
| JEL: | I00 J31 L31 L84 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2254&r=soc |
| By: | Neri, Frank (University of Wollongong); Ville, Simon (University of Wollongong) |
| Abstract: | International university students arrive in their host country denuded of supporting social networks and confronting unfamiliar cultural and educational institutions, an experience that adversely impacts on their wellbeing and academic performance. Our study extends these general notions in the recent literature by investigating how, and to what extent, students renew their social networks. We adopt the social capital framework and conduct a participant survey in order to categorise and measure these different investments in clubs, employment, and friendships. Our results reveal a high degree of variability of social capital renewal between students and, among the more active, there remained a tendency to build close networks only with students from their own county of origin. |
| Keywords: | Social capital, international students, Wollongong Australia |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp06-19&r=soc |
| By: | Jens Ludwig; Jeffrey R. Kling |
| Abstract: | Understanding whether criminal behavior is “contagious” is important for law enforcement and for policies that affect how people are sorted across social settings. We test the hypothesis that criminal behavior is contagious by using data from the Moving to Opportunity (MTO) randomized housing-mobility experiment to examine the extent to which lower local-area crime rates decrease arrest rates among individuals. Our analysis exploits the fact that the effect of treatment group assignment yields different types of neighborhood changes across the five MTO demonstration sites. We use treatment-site interactions to instrument for measures of neighborhood crime rates, poverty and racial segregation in our analysis of individual arrest outcomes. We are unable to detect evidence in support of the contagion hypothesis. Neighborhood racial segregation appears to be the most important explanation for across-neighborhood variation in arrests for violent crimes in our sample, perhaps because drug market activity is more common in high-minority neighborhoods. |
| JEL: | H43 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12409&r=soc |
| By: | Michael D. Smith (Carnegie Mellon University); Rahul Telang (Carnegie Mellon University) |
| Abstract: | Improving the information retrieval (IR) performance of peer-to-peer networks is an important and challenging problem. Recently, the computer science literature has attempted to address this problem by improving IR search algorithms. However, in peer-to-peer networks, IR performance is determined by both technology and user behavior, and very little attention has been paid in the literature to improving IR performance through incentives to change user behavior. We address this gap by combining the club goods economics literature and the IR literature to propose a next generation file sharing architecture. Using the popular Gnutella 0.6 architecture as context, we conceptualize a Gnutella ultrapeer and its local network of leaf nodes as a “club” (in economic terms). We specify an information retrieval-based utility model for a peer to determine which clubs to join, for a club to manage its membership, and for a club to determine to which other clubs they should connect. We simulate the performance of our model using a unique real-world dataset collected from the Gnutella 0.6 network. These simulations show that our club model accomplishes both performance goals. First, peers are self-organized into communities of interest — in our club model peers are 85% more likely to be able to obtain content from their local club than they are in the current Gnutella 0.6 architecture. Second, peers have increased incentives to share content — our model shows that peers who share can increase their recall performance by nearly five times over the performance offered to free-riders. We also show that the benefits provided by our club model outweigh the added protocol overhead imposed on the network for the most valuable peers. |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0412&r=soc |
| By: | John Malcolm Dowling (School of Economics and Social Sciences, Singapore Management University); Yap Chin Fang (Tampines Junior College, Singapore) |
| Abstract: | The paper suggests that maintenance of a homeostatic equilibrium provides a rationale for many actions of economic agents. Homeostatic equilibrium has physical, economic, emotional, psychological and environmental dimensions. The characteristics of this equilibrium include feelings of safety, trust, connectedness with friends, family and community, and a predictable and welcoming social and work environment. Individuals generally make decisions that help them move toward and achieve this state of equilibrium. Departure from homeostasis reduces well being and stimulates agents to take actions that will return them to a state of homeostasis. This hypothesis is tested with probit analysis using sample responses from the four waves of the World Values Surveys conducted between 1980 and 2002. Results generally support the homeostasis hypothesis. Variables that reflect departure from homeostasis such as divorce and poor health are highly significant, pointing to a reduction in well being. Variables that reflect the importance of friends, family, a trusting social and work environment have significant impacts to raise well being. |
| JEL: | I3 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:09-2006&r=soc |
| By: | José Antonio Ocampo |
| Abstract: | This paper offers three guiding principles for a better relationship between the economy and democracy: democracy as the extension of citizenship; democracy as diversity; and democracy as complementary to clear, strong macroeconomic rules. This view, it is argued, implies that economic and social institutions must be subject to democratic political choice. In this context, it analyses the role of both national and international institutions in improving the complementarity of the market, social cohesion and democracy. The central role of economic and social rights serves as the overarching framework for the analysis. |
| Keywords: | citizenship, democracy, social cohesion, market economy, inequality, property rights |
| JEL: | H1 H4 I3 E61 D6 F02 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:9&r=soc |
| By: | Brad R. Humphreys (Department of Recreation, Sport and Tourism, University of Illinois); Jane E. Ruseski (Department of Kinesiology and Community Health, University of Illinois) |
| Abstract: | This paper examines the economic determinants of participation in physical activity by developing and analyzing a consumer choice model of participation and by testing the predictions of this model using data drawn from the Behavioral Risk Factor Surveillance Survey (BRFSS). Both emphasize that individuals face two distinct decisions: (1) should I participate in sport?; and (2) how much time should I spend participating in sport? The evidence highlights the importance of selectivity. The economic factors that affect these two decisions work in opposite directions; factors that increase the likelihood of participation generally decrease the amount of time spent participating. |
| Keywords: | physical activity, time allocation, health production |
| JEL: | I20 I12 I18 L83 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0613&r=soc |
| By: | Jeffrey S. DeSimone |
| Abstract: | This paper examines the relationship between membership in social fraternities and sororities and binge drinking among 18–24 year old full-time four-year college students who participated in the 1995 National College Health Risk Behavior Survey. To deal with unobserved heterogeneity in binge drinking incidence and frequency regressions, I enter as explanatory variables various measures of situational and overall alcohol use. When these are added, the fraternity membership coefficient is substantially reduced in size, but remains large and highly significant. This suggests that fraternity membership increases binge drinking. If not, it identifies a very specific mechanism underlying the decision to join a fraternity: members drink more intensely than non-members even while doing so in similar frequencies and situations and for similar lengths of time. Particularly notable is that behavior by underage students appears to drive the relationship. |
| JEL: | I12 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12468&r=soc |
| By: | Mark A. Jamison (University of Florida); |
| Abstract: | I examine the effects of market concentration on connectivity in network industries. Using Cournot interactions for a duopoly, each network chooses quantity, quality for communications within the provider’s own network (internal quality), and quality for communications between the provider’s network and other networks (external quality). I find that large networks choose higher internal quality than do small networks and large networks choose higher internal quality than external quality. I also find that providers prefer flexible technologies that allow them to simultaneously choose outputs and qualities. Small networks prefer higher external quality than internal quality except when they make credible quality commitments before choosing output and have higher marginal operating costs than large networks. Networks choose identical external quality unless they have exogenously determined customer bases. |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0408&r=soc |
| By: | Nadja Trhal; Ralf Radermacher |
| Abstract: | We experimentally examine the impact of self-inflicted neediness on the solidarity behavior of subjects. In one treatment in our solidarity experiment all subjects face the same probability of becoming needy, in the other treatment subjects have the choice between a secure payment and a lottery including a certain probability of becoming needy. Then we ask all subjects how much they will give to losers in their group thus investigating if people are willing to give the same gifts whether or not subjects are responsible for inequality in payoffs. We found evidence for allocative as well as for procedural utility concerns. |
| Keywords: | solidarity game, self-inflicted neediness, responsibility, procedural utility |
| JEL: | C91 D63 |
| Date: | 2006–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:kls:series:0028&r=soc |
| By: | Oksana Loginova (Department of Economics, University of Missouri-Columbia); X. Henry Wang (Department of Economics, University of Missouri-Columbia); Haibin Lu |
| Abstract: | AIn this paper we use mechanism design approach to find the optimal file-sharing mechanism in a peer-to-peer network. This mechanism improves upon existing incentive schemes. In particular, we show that peer-approved scheme is never optimal and service-quality scheme is optimal only under certain circumstances. Moreover, we find that the optimal mechanism can be implemented by a mixture of peer-approved and service-quality schemes. |
| Keywords: | peer-to-peer networks, mechanism design. |
| JEL: | D82 C7 |
| Date: | 2006–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0608a&r=soc |
| By: | Jonathan Gruber; Daniel M. Hungerman |
| Abstract: | Recently economists have begun to consider the causes and consequences of religious participation. An unanswered question in this literature is the effect upon individuals of changes in the opportunity cost of religious participation. In this paper we identify a policy-driven change in the opportunity cost of religious participation based on state laws that prohibit retail activity on Sunday, known as “blue laws.” Many states have repealed these laws in recent years, raising the opportunity cost of religious participation. We construct a model which predicts, under fairly general conditions, that allowing retail activity on Sundays will lower attendance levels but may increase or decrease religious donations. We then use a variety of datasets to show that when a state repeals its blue laws religious attendance falls, and that church donations and spending fall as well. These results do not seem to be driven by declines in religiosity prior to the law change, nor do we see comparable declines in membership or giving to nonreligious organizations after a state repeals its laws. We then assess the effects of changes in these laws on drinking and drug use behavior in the NLSY. We find that repealing blue laws leads to an increase in drinking and drug use, and that this increase is found only among the initially religious individuals who were affected by the blue laws. The effect is economically significant; for example, the gap in heavy drinking between religious and non religious individuals falls by about half after the laws are repealed. |
| JEL: | H1 J2 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12410&r=soc |
| By: | Leah Brooks |
| Abstract: | When the median voter's preference sets the level of local public goods, some voters are left unsatisfied. Is there an institution by which subsets of voters can resolve the collective action problem and increase the local provision of public goods? If so, what are the consequences? In response to problems such as crime and vandalism, neighborhood property owners have established Business Improvement Districts (BIDs) to provide local public goods. When a BID is approved by a majority of property owners in a neighborhood, state law makes contributions to the BID budget mandatory. This resolution of the neighborhood's collective action problem reduces crime - BIDs in the city of Los Angeles are robustly associated with crime declines of 5 to 9 percent. Indeed, crime falls regardless of estimation technique: fixed effects; comparing BIDs to neighborhoods that considered, but did not adopt, BIDs; using propensity score matching; and comparing BIDs to their neighbors. Strikingly, these declines are purchased cheaply. Attributing all BID expenditure to violent crime reduction, and thus ignoring the impact of BID expenditure on many quality-of-life crimes, BIDs spend $21,000 to avert one violent crime. This higher bound estimate is substantially lower than the $57,000 social cost of a violent crime. |
| JEL: | R5 H7 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:mcl:mclwop:2006-04&r=soc |
| By: | Michael S. Visser; William T. Harbaugh; Naci Mocan (University of Oregon Economics Department) |
| Abstract: | We report results from economic experiments that provide a direct test of the hypothesis that criminal behavior responds rationally to changes in the possible rewards and in the probability and severity of punishment. The experiments involve decisions that are best described as petty larceny, and are done using high school and college students who can anonymously take real money from each other. We find that decisions about whether and how much to steal are, in general, rational and responsive to the variations in tradeoffs, and sometimes, though not always, to the overall availability of criminal opportunities. |
| Keywords: | crime, rational choice, revealed preference |
| Date: | 2006–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:ore:uoecwp:2006-11&r=soc |
| By: | Ethan Kapstein |
| Abstract: | Since 1974 the world has experienced a “third wave” of democratization. Ensuring that these new democracies consolidate is critical to both global prosperity and peace. Unfortunately, the academic literature that might help policy-makers shape appropriate foreign assistance programs remains underdeveloped, in that it lacks strong behavioral foundations, or explanations of why people act the way they do. This paper argues that the process of democratic consolidation requires a transition from clientelistic to contractual exchange relationships. Without that transition, efforts to promote democratic consolidation are unlikely to succeed. |
| Keywords: | democracy, foreign assistance, economic development |
| JEL: | O17 F35 D73 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:52&r=soc |
| By: | Angelo Antoci (University of Sassari); Massimiliano Landi (School of Economics and Social Sciences, Singapore Management University); Pier Luigi Sacco (IUAV, Venice) |
| Abstract: | We consider a (deterministic) evolutionary model where players have dynamic expectations about the strategy distribution. We provide a global analysis of the co-evolution of play and expectations for a generic two{by{two game. Besides the the typical indeterminacy of the evolutionary dynamics, we find some other ones: for any initial strategy configuration the dynamics can converge to any asymptotically stable fixed point, for different initial values of the expectations. Moreover, starting from the same initial pair of strategy configuration and values of expectations, the dynamics may lead to different asymptotically stable fixed points for different parameters of the expectations. |
| Keywords: | evolutionary games, dynamic systems, animal spirits |
| JEL: | C73 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:10-2006&r=soc |
| By: | Nicholas Economides (Stern School of Business, NYU); V. Brian Viard (Graduate School of Business, Stanford University) |
| Abstract: | We discuss the case of a monopolist of a base good in the presence of a complementary good provided either by it or by another firm. We assess and calibrate the extent of the influence on the profits from the base good that is created by the existence of the complementary good, i.e., the extent of the network effect. We establish an equivalence between a model of a base and a complementary good and a reduced-form model of the base good in which network effects are assumed in the consumers’ utility functions as a surrogate for the presence of direct or indirect network effects, such as complementary goods produced by other firms. We also assess and calibrate the influence on profits of the intensity of network effects and quality improvements in both goods. We evaluate the incentive that a monopolist of the base good has to improve its quality rather than that of the complementary good under different market structures. Finally, based on our results, we discuss a possible explanation of the fact that Microsoft Office has a significantly higher price than Microsoft Windows although both products have comparable market shares. |
| JEL: | L12 L13 C63 D42 D43 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0504&r=soc |