nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2006‒11‒18
twenty-one papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Building Social Networks By Robert P. Gilles; Sudipta Sarangi
  2. Political Parties and Rent-seeking through Networks By Topi Miettinen; Panu Poutvaara
  3. Altruism in the (Social) Network. By Pablo Brañas-Garza; Ramón Cobo-Reyes; Maria Paz Espinosa; Natalia Jiménez; Giovanni Ponti
  4. Structural Holes, Innovation and the Distribution of Ideas By Cowan, Robin; Jonard, Nicolas
  5. The structure of R&D collaboration networks in the European Framework Programmes By Roediger-Schluga, Thomas; Barber, Michael J.
  6. Social Interaction and Urban Sprawl By Jan K. Brueckner; Ann G. Largey
  7. Links and Architecture in Village Networks By Pramila Krishnan; Emanuela Sciubba
  8. Teen Childbearing and Conservative Religious Communities By Linda Loury
  9. Heterogeneity and Common Pool Resources: Collective Management of Forests in Himachal Pradesh, India By Sirisha C. Naidu
  10. Is the Eldest Son Different? The Residential Choice of Siblings in Japan By Midori Wakabayashi; Charles Y. Horioka
  11. Organizational Capability of Local Societies in Rural Development: A Comparative Study of Microfinance Organizations in Thailand and the Philippines By Shigetomi, Shinichi
  12. What Motivates Common Pool Resource Users? Experimental Evidence from the Field By Maria Alejandra Vélez; John K. Stranlund; James J. Murphy
  13. All in the Extended Family: Grandparents, Aunts, and Uncles and Educational Attainment By Linda Loury
  14. Should We Maximize National Happiness? By Bruno S. Frey; Alois Stutzer
  15. Putting Reciprocity to Work - Positive versus Negative Responses in the Field By Sebastian Kube; Michel André Maréchal; Clemens Puppe
  16. Bringing Non-governmental Actors into the Policymaking Process: The Case of Local Development Policy in Thailand By Shigetomi, Shinichi
  17. Competing for Customers in a Social Network By Pradeep Dubey; Rahul Garg; Bernard De Meyer
  18. The Balkanization of Politics: Crime and Corruption in Albania By Daniela Irrera
  19. The Coevolution of Economic and Political Development By Fali Huang
  20. Does Leaving Home Make You Poor? Evidence from 13 European Countries By Arnstein Aassve; Maria A. Davia; Maria Iacovou; Stefano Mazzuco
  21. Gender, Ethnic Identity and Work By Amelie Constant; Liliya Gataullina; Klaus F. Zimmermann

  1. By: Robert P. Gilles; Sudipta Sarangi
    Abstract: We examine the process of building social relationships as a non-cooperative game that requires mutual consent and involves reaching out to others at a cost. Players create their social network from amongst their set of acquaintances. Having acquaintances allows players to form naive beliefs about the feasibility of building direct relationships with their acquaintances. These myopic beliefs describe how the other players are expected to respond to the initiation of a link by a player. We introduce a stability concept called "monadic stability" where agents play a best response to their formed myopic beliefs such that these beliefs are self-confirming. The resulting equilibrium networks form subset of the set of pairwise stable networks.
    Keywords: Social networks, network formation, pairwise stability, trust, self-confirming equilibrium
    JEL: C72 C79 D85
    Date: 2006
  2. By: Topi Miettinen; Panu Poutvaara
    Abstract: We argue that anti-corruption laws may provide an efficiency rationale for why political parties should meddle in the distribution of non-ideological political nominations. Anti-corruption laws forbid trade in nominations made by politicians. However, citizens may pay for gaining access to politicians, thereby becoming potential candidates for nominations. Such rent-seeking results in excessive network formation. Political parties may reduce wasteful network formation, thanks to their ability to enter into exclusive membership contracts. This holds even though anti-corruption laws also bind political parties.
    Keywords: Political parties, Two-sided Platforms, Political Nominations, Rent-seeking, Network Formation
    JEL: D72 D85 L14
    Date: 2006–11
  3. By: Pablo Brañas-Garza (Universidad de Granada); Ramón Cobo-Reyes (Universidad de Granada); Maria Paz Espinosa (Universidad del País Vasco); Natalia Jiménez (Universidad de Alicante); Giovanni Ponti (Università di Ferrara; Universidad de Alicante)
    Abstract: This paper explores the role of social integration on altruistic behavior. To this aim, we develop a two-stage experimental protocol based on the classic Dictator Game. In the first stage, we ask a group of 77 undergraduate students in Economics to elicit their social network; in the second stage, each of them has to unilaterally decide over the division of a fixed amount of money to be shared with another anonymous member in the group. Our experimental design allows to control for other variables known to be relevant for altruistic behavior: framing and friendship/acquaintance relations. Consistently with previous research, we find that subjects favor their friends and that framing enhances altruistic behavior. Once we control for these effects, social integration (measured by betweenness, a standard centrality measure in network theory) has a positive effect on giving: the larger social isolation within the group, the more likely it is the emergence of selfish behavior. These results suggest that information on the network structure in which subjects are embedded is crucial to account for their behavior.
    Keywords: altruism, social integration, social networks, experiments
    JEL: C91 D64 Z13
    Date: 2006–11–13
  4. By: Cowan, Robin (UNU-MERIT); Jonard, Nicolas (Université de Luxembourg)
    Abstract: We model knowledge diffusion in a population of agents situated on a network, interacting only over direct ties. Some agents are by nature traders, others are by nature "givers": traders demand a quid pro quo for information transfer; givers do not. We are interested in efficiency of diffusion and explore the interplay between the structure of the population (proportion of traders), the network structure (clustering, path length and degree distribution), and the scarcity of knowledge. We find that at the global level, trading (as opposed to giving) reduces efficiency. At the individual level, highly connected agents do well when knowledge is scarce, agents in clustered neighbourhoods do well when it is abundant. The latter finding is connected to the debate on structural holes and social capital.
    Keywords: Innovation, Diffusion of Innovations, Knowledge, Information, Networks
    JEL: O31 D8
    Date: 2006
  5. By: Roediger-Schluga, Thomas (Department of Technology Policy, ARC Systems Research); Barber, Michael J. (Centro de Ciências Matemáticas, Universidade da Madeira)
    Abstract: Using a large and novel data source, we study the structure of R&D collaboration net-works in the first five EU Framework Programmes (FPs). The networks display proper-ties typical for complex networks, including scale-free degree distributions and the small-world property. Structural features are common across FPs, indicating similar network formation mechanisms despite changes in governance rules. Several findings point towards the existence of a stable core of interlinked actors since the early FPs with integration increasing over time. This core consists mainly of universities and research organisations. We observe assortative mixing by degree of projects, but not by degree of organisations. Unexpectedly, we find only weak association between central projects and project size, suggesting that different types of projects attract different groups of actors. In particular, large projects appear to have included few of the pivotal actors in the networks studied. Central projects only partially mirror funding priorities, indicating field-specific differences in network structures. The paper concludes with an agenda for future research.
    Keywords: R&D collaboration, EU Framework Programmes, Complex Networks, Small World Effect, Centrality Measures, European Research Area
    JEL: L14 O38 Z13
    Date: 2006
  6. By: Jan K. Brueckner; Ann G. Largey
    Abstract: Various authors, most notably Putnam (2000), have argued that low-density living reduces social capital and thus social interaction, and this argument has been used to buttress criticisms of urban sprawl. If low densities in fact reduce social interaction, then an externality arises, validating Putnam’s critique. In choosing their own lot sizes, consumers would fail to consider the loss of interaction benefits for their neighbors when lot size is increased. Lot sizes would then be inefficiently large, and cities excessively spread out. The paper tests the premise of this argument (the existence of a positive link between interaction and density) using data from the Social Capital Benchmark Survey. In the empirical work, social interaction measures for individual survey respondents are regressed on census-tract density and a host of household characteristics, using an instrumental-variable approach to control for the potential endogeneity of density.
    JEL: J11 R10
    Date: 2006
  7. By: Pramila Krishnan; Emanuela Sciubba (School of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: This paper provides a theoretical framework of endogenous network formation that yields testable predictions for the network architectures generated by a particular informal institution common in village economies. We test the implications of the model on data from rural Ethiopia. In contrast to the current literature, we demonstrate the critical role of both number of links and architecture in determining the impact of social networks on outcomes. Social capital matters, but its impact differs by the architecture of the network to which one belongs.
    Keywords: Endogenous network formation, social networks, rural institutions.
    JEL: D85 Z13 O12 O17
    Date: 2006–11
  8. By: Linda Loury
    Abstract: The importance of neighborhood background characteristics on socioeconomic outcomes is uncertain because some dimensions of neighborhood quality such as social norms and social cohesion are difficult to measure. This paper shows that teen childbearing declines with increases in the fraction of a community’s religious adherents who are Catholics or Conservative Protestants. This finding is not simply due to related differences in local economic costs and benefits or with unobserved family or individual characteristics. Instead the results reflect social norms about teen sexual activity. They indicate that policy choices should take account of the influence of norms on individual behavior.
    Date: 2006
  9. By: Sirisha C. Naidu (Wright State University)
    Abstract: In the past two decades, theoretical and empirical evidence suggests that communities of resource users are capable of overcoming social dilemmas, and are capable of creating and sustaining institutions designed to prevent degradation of common pool natural resources. However, there is incomplete understanding of what motivates this group-level behavior and why some communities are better adept at solving collective action problems than others. This paper specifically explores the role of group heterogeneity in collective action among forest communities in the northwestern Himalayas. Heterogeneity can have important social and ecological consequences and understanding both its nature and effects can help in neutralizing the negative and enhancing the positive. Based on data from 54 forest communities in Himachal Pradesh, India, this paper finds that heterogeneity has at least three dimensions: wealth, identity and interest, and each may significantly affect collective actions related to natural resource management. However, their effects are far from simple and linear.
    Keywords: common pool resources, group outcomes, heterogeneity, forests
    JEL: D63 D71 H41 Q23 Q57
    Date: 2005–11
  10. By: Midori Wakabayashi; Charles Y. Horioka
    Abstract: In this paper, we analyze the determinants of the living arrangements of elderly parents and their children (whether elderly parents live with their children, and if so, with which child) in Japan using micro data from a household survey. We find that the proportion of elderly parents living with their eldest sons is much higher than that of elderly parents living with children other than the eldest son, even if the eldest son is not the eldest child. Moreover, we find that elderly parents are more likely to live with their eldest sons if the father was a self-employed worker before retirement, whereas they are more likely to live with a child other than the eldest son if the father was an executive before retirement. In addition, daughters whose husbands adopt the daughter's surname are more likely to live with the daughter's parents. All of these findings are consistent with the dynasty and/or strategic bequest (selfish life cycle) models. We also find that the living arrangements of elderly parents are still very much based on Japanese social norms and traditions. Thus, we find support for all models of household behavior other than the altruism model.
    JEL: D12 D91 J14 Z13
    Date: 2006–10
  11. By: Shigetomi, Shinichi
    Abstract: The importance of organizing local people for development work is widely recognized. Both governmental and non-governmental agencies have implemented various projects that have needed and encouraged collective action by people. Often, however, such projects malfunction after the outside agencies retreat from the project site, suggesting that making organizations is not the same as making a system of making organizations. The latter is essential to make rural organizations self-reliant and sustainable. This paper assumes that such a system exists in local societies and focuses on the capacity of local societies for creating and managing organizations for development. It reveals that (1) such capability differs according to the locality, (2) the difference depends on the structure of the organizations that coordinate people's social relations, and (3) the local administrative bodies define, at least partly, the organizational capability of local societies. We compare two rural societies, one in Thailand and the other in the Philippines, which show clear contrasts in both the form of microfinance organizations and the way of making these organizations.
    Keywords: Local organization, Rural society, Rural development, Microfinance, Local administration, Thailand, Philippines
    JEL: O18 O53 Q00 Z13
    Date: 2006–02
  12. By: Maria Alejandra Vélez (The Earth Institute, Columbia University); John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); James J. Murphy (Department of Resource Economics, University of Massachusetts Amherst)
    Abstract: This paper develops and tests several models of pure Nash strategies of individuals who extract from a common pool resource when they are motivated by a combination of self-interest and other motivations such as altruism, reciprocity, inequity aversion and conformism. We test whether an econometric summary of subjects’ strategies is consistent with one of these motivations using data from a series of common pool resource experiments conducted in three regions of Colombia. As expected, average extraction levels are less than that predicted by a model of pure self-interest, but are nevertheless sub-optimal. Moreover, we find that a model of conformism with monotonically increasing best response functions best describes average strategies. Our empirical results are inconsistent with models of altruism, reciprocity and inequity aversion.
    Keywords: common pool resources, experiments, altruism, reciprocity, conformism
    JEL: C93 D64 H41 Q20 C70
    Date: 2005–03
  13. By: Linda Loury
    Abstract: Previous work on social interactions has analyzed the effects of nuclear family, peer, school, and neighborhood characteristics. This paper complements this research by first showing that individuals from similar nuclear families often differ in extended family member characteristics. It then demonstrates that older extended family members - aunts, uncles, and grandparents – independently affect college attendance probabilities and test score results of their younger relatives. In some cases, the sizes of the estimated effects are large enough to substantially narrow the achievement gap between disadvantaged and other youth.
    Date: 2006
  14. By: Bruno S. Frey; Alois Stutzer
    Abstract: Cross-disciplinary ‘happiness research’ has made big progress in the measurement of individual welfare. This development makes it tempting to pursue the old dream of maximizing aggregate happiness as a social welfare function. However, we postulate that the appropriate approach is not to maximize aggregate happiness in seeking to improve outcomes by direct policy interventions. The goal of happiness research should rather be to improve the nature of the processes through which individuals can express their preferences. Individuals should become better able to advance their idea of the good life, both individually and collectively.
    Keywords: Economic policy; happiness; life satisfaction; political economy; social welfare; utility
    JEL: D60 D70 H11 I31
    Date: 2006–10
  15. By: Sebastian Kube; Michel André Maréchal; Clemens Puppe
    Abstract: We study the role of reciprocity in a labor market field experiment. In a recent paper, Gneezy and List (2006) investigate the impact of gift exchange in this context and find that it has only a transient effect on long run outcomes. Extending their work to examine both positive and negative reciprocity, we find consonant evidence in the positive reciprocity condition: the gift does not work well in the long run (if at all). Yet, in the negative reciprocity treatment we observe much stronger effects: a wage reduction has a significant and lasting negative impact on efforts. Together, these results highlight the asymmetry of positive and negative reciprocity that exists in the field, and provide an indication of the relative importance of each in the long run.
    Keywords: reciprocity, gift exchange, field experiment
    JEL: C93 J30
    Date: 2006–11
  16. By: Shigetomi, Shinichi
    Abstract: During the past two decades in Thailand, non-governmental actors, such as NGOs, intellectuals, and people's organizations, have found widening opportunities to participate in policy formation and in the implementation of local development. The government has facilitated the formation of civil society forums, in the expectation of influencing local-level governance. The last two national five-year development plans were formulated after taking into account the voices of people in the provinces. Even though they may seem petty, some state funds are now transmitted through non-governmental institutions for policy implementation at the grassroots level. These changes have their origin in a reformation of rural development administration in early 1980s. This reformation in due course led to policies that have allowed the participation of non-governmental actors. Meanwhile, rural people have proved their ability to engage in participatory development by forming various local organizations, while NGOs have grown to be proficient facilitators of local development. This paper describes the process whereby three leading actors, namely the government, local people, and the NGOs, have interacted to bring about a more participatory system of local development administration.
    Keywords: Social movements, Local development, Thailand, NGOs, Non-governmental organizations, Civil society, Decision making, Rural development
    JEL: O20 R10
    Date: 2006–08
  17. By: Pradeep Dubey (Dept. of Economics, SUNY-Stony Brook); Rahul Garg (IBM India Research Lab); Bernard De Meyer (PSE, Universite Paris)
    Abstract: There are many situations in which a customer's proclivity to buy the product of any firm depends not only on the classical attributes of the product such as its price and quality, but also on who else is buying the same product. We model these situations as games in which firms compete for customers located in a "social network." Nash Equilibrium (NE) in pure strategies exist in general. In the quasi-linear version of the model, NE turn out to be unique and can be precisely characterized. If there are no a priori biases between customers and firms, then there is a cut-off level above which high cost firms are blockaded at an NE, while the rest compete uniformly throughout the network. We also explore the relation between the connectivity of a customer and the money firms spend on him. This relation becomes particularly transparent when externalities are dominant: NE can be characterized in terms of the invariant measures on the recurrent classes of the Markov chain underlying the social network. Finally we consider convex (instead of linear) cost functions for the firms. Here NE need not be unique as we show via an example. But uniqueness is restored if there is enough competition between firms or if their valuations of clients are anonymous.
    Keywords: Social network, Game theory, Nash equilibrium, Competition game on a social network
    JEL: A14 C72 D11 D21 L1 L2
    Date: 2006–11
  18. By: Daniela Irrera
    Abstract: In the last few years, Albania, as well as other South Eastern and Mediterranean countries, have shown increased growth in corruption affecting every level of political power. Organized crime is becoming more sophisticated as it consolidates links between Albanian clans and the wider criminal world. According to the EU, the FBI and other police organization reports, while the situation concerning organized crime and corruption is grave throughout the Balkans, it is especially so in Albania, even as its authorities are continuing to implement talks for future membership in the EU. Efforts to combat this problem have thus far been insufficient. Authorities appear to not admit the full extent of criminal links among individuals across state offices, the police and politics. In many areas the traffickers work with the complicity of police and customs officials and enjoy the protection of high-ranking politicians. Corruption remains endemic and is destined to seriously undermine efforts for democratization of the society. This is a sort of vicious cycle: every institution in Albania is affected by organized crime which hampers democracy and economic development; any attempts to change the situation, like the Stability Pact for South Eastern Europe seem to be ineffective. This paper aims to analyze the problem of corruption and illegality in the current period in Albania and to measure its infiltration, via local authorities, into every level of the political, economic and social life.
    Keywords: EU-East-Central Europe; transparency; democratization; civil society; pre-negotiation
    Date: 2006–05–15
  19. By: Fali Huang (School of Economics and Social Sciences, Singapore Management University)
    Abstract: This paper establishes a simple model of long run economic and political development, which is driven by the inherent technical features of different production factors, and political conflicts among factor owners on how to divide the outputs. The main capital form in economy evolves from land to physical capital and then to human capital, which enables their respective owners (landlords, capitalists, and workers) to gain political powers in the same sequence, shaping the political development path from monarchy to elite ruling and finally to full suffrage. When it is too costly for any group of factor owners to repress others, political compromise is reached and economic progress is not blocked; otherwise, the political conflicts may lead to economic stagnation.
    Keywords: Economic Development, Political Development, Class Structure, Land, Physical Capital, Human Capital, Monarchy, Suffrage Extension.
    JEL: O10 O40 P16 N10
    Date: 2006–08
  20. By: Arnstein Aassve (Institute for Social and Economic Research); Maria A. Davia (Universidad de Castilla-La Mancha); Maria Iacovou (Institute for Social and Economic Research); Stefano Mazzuco (University of Padua)
    Abstract: A particular feature of poverty in Europe is the close connection between young people’s living arrangement and economic disadvantage. Leaving home is generally associated with a higher degree of poverty and compared to other events, such as experiencing unemployment and having children, it is by far the most important driver behind youth poverty. There is however huge variations across countries. It is natural to assume that young people would delay leaving home if they consider this to jeopardise their level of wellbeing (i.e. entering poverty). In this paper we implement a statistical approach to analyse the causal effect of leaving home on entering poverty. We use data from the European Community Household Panel and propensity score estimation techniques, and find that the event of leaving home does have a particularly strong effect in entering poverty in Scandinavian countries, but rather weak effect among Mediterranean countries.
    Keywords: poverty dynamics, young people, youth transitions
    Date: 2006–09
  21. By: Amelie Constant; Liliya Gataullina; Klaus F. Zimmermann
    Abstract: The European Union's strategy to raise employment is confronted with very low work participation among many minority ethnic groups, in particular among immigrants. This study examines the potential of immigrants' identification with the home and host country ethnicity to explain that deficit. It introduces a two-dimensional understanding of ethnic identity, as a combination of commitments to the home and host cultures and societies, and links it to the labour market participation of immigrants. Using unique German survey data, the paper identifies marked gender differences in the effects of ethnic identification on the probability to work controlling for a number of other determinants. While ethnically assimilated immigrant men outperform those who are ethnically separated and marginalized, they are not different from those with openness to both cultures. Assimilated immigrant women do better than those separated and marginalized, but those who develop an attachment to both cultures clearly fare the best.
    Keywords: Ethnicity, ethnic identity, acculturation, immigrant assimilation, immigrant integration, gender, work
    JEL: F22 J15 J16 Z10
    Date: 2006

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