nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2006‒11‒25
fifteen papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Strategic Interaction in the Sex Market By Morrow, John; Sivan, Yoav
  2. Social Capital as a Determinant of Economic Growth in Africa By Jerven, Morten
  3. Distinguishing Social Preferences from Preferences for Altruism By Raymond Fisman; Shachar Kariv; Daniel Markovits
  4. Organizational citizenship behavior and team performance: A longitudinal field study. By Tjai Nielsen; Eric Sundstrom
  5. Formation of Segregated and Integrated Groups By Alison Watts
  6. The Economics of Citizenship: A Common Intellectual Ground for Social Scientists? By Don J. DeVoretz
  7. Shifting Governance in Slovensky Raj National Park By Tatiana Kluvánková-Oravská; Veronika Chobotová
  8. Governance choice for strategic corporate social responsibility: Evidence from Central America. By Jorge Rivera; Bryan W. Husted; David B. Allen
  9. Endogenous Verifiability in Relational Contracting By Kvaløy, Ola; Olsen, Trond E.
  10. Trends in the distributions of income and human capital within metropolitan areas: 1980-2000 By Christopher H. Wheeler; Elizabeth A. La Jeunesse
  11. Heterogeneity in Nash Networks By Sudipta Sarangi; Pascal Billand; Christophe Bravard
  12. Social Exchange and Common Agency in Organizations By Robert Dur; Hein Roelfsema
  13. Migrant Networks and Foreign Direct Investment By Beata S. Javorcik; Çaglar Özden; Mariana Spatareanu; Cristina Neagu
  14. Accounting for Inequality: A Proposed Revision of the Human Development Index By Elizabeth Stanton
  15. Why do poor farmers default less?: Case of Indian informal credit market A game theoretic exploration By Rajeev, Meenakshi; Ranade, Ranjeet; Deb, Sarmistha

  1. By: Morrow, John; Sivan, Yoav
    Abstract: There have been few attempts to empirically explain the pursuit of short term relationships and sex in a formal context. Previous work has lamented the paucity of empirical studies which utilize incentive driven behavior to draw conclusions and recommend policy. We provide an empirical approach derived from a game theoretic model of social interaction and apply it to a population of high interest. Specifically, we apply the approach to a population of sexually active men who have sex with men (MSM) in a large metropolitan area and derive qualitative conclusions regarding how individuals behave in the marketplace for sex.
    Keywords: sex; matching; dating; mating; social networks; network formation
    JEL: D02 C78
    Date: 2006–01–31
  2. By: Jerven, Morten (London School of Economics)
    Abstract: This paper reviews the methodology and evidence of recent regression literature attributing the African growth shortfall to lack of social capital. It finds that the literature is not able to account for the actual economic growth experience, only in a significantly reformulated and misleading way. The paper considers how social capital is defined and which proxies are used in the literature, and notes considerable theoretical and empirical inconsistency. In conclusion the paper supports the contention that social capital is best understood as an outcome, and not a cause of growth. At the present state of the literature explaining economic growth the use of social capital as a determinant. has not been empirically useful nor analytically coherent.
    Keywords: Social Capital; Africa; Economic Growth
    JEL: N17 O47 Z13
    Date: 2006–11–16
  3. By: Raymond Fisman (Graduate School of Business, Columbia University); Shachar Kariv (Department of Economics, University of California, Berkeley); Daniel Markovits (Yale Law School)
    Abstract: We report a laboratory experiment that enables us to distinguish preferences for altruism (concerning tradeoffs between own payoffs and the payoffs of others) from social preferences (concerning tradeoffs between the payoffs of others). By using graphical representations of three-person Dictator Games that vary the relative prices of giving, we generate a very rich data set well-suited to studying behavior at the level of the individual subject. We attempt to recover subjects’ underlying preferences by estimating a constant elasticity of substitution (CES) model that represents altruistic and social preferences. We find that both social preferences and preferences for altruism are highly heterogeneous, ranging from utilitarian to Rawlsian. In spite of this heterogeneity across subjects, there exists a strong positive withinsubject correlation between the efficiency-equity tradeoffs made in altruistic and social preferences.
    JEL: C79 C91 D64
    Date: 2005–11
  4. By: Tjai Nielsen (The George Washington University School of Business); Eric Sundstrom (University of Tennessee, Knoxville)
  5. By: Alison Watts (Southern Illinois University)
    Abstract: A model of group formation is presented where the number of groups is fixed and a person can only join a group if the group’s members approve the person’s joining. Agents have either local status preferences (each agent wants to be the highest status agent in his group) or global status preferences (each agent wants to join the highest status group that she can join). For both preference types, conditions are provided which guarantee the existence of a segregated stable partition where similar people are grouped together and conditions are provided which guarantee the existence of an integrated stable partition where dissimilar people are grouped together. Additionally, in a dynamic framework we show that if a new empty group is added to a segregated stable partition, then integration may occur.
    Keywords: Group Formation, Stable Partition, Segregation, Integration
    JEL: C7 D6
    Date: 2006–10
  6. By: Don J. DeVoretz (RIIM, Simon Fraser University and IZA Bonn)
    Abstract: Economists studying the economic behaviour of immigrants have tended to avoid serious interdisciplinary work. I argue that when presented with a particular set of research questions that lend themselves to a utility maximisation framework, an economist will be able to pursue interdisciplinary work. I further argue that the necessary if not sufficient ingredient for true economic collaborative research has been met in the field of citizenship acquisition. I review the existing empirical research on citizenship acquisition and its economic impacts to support this argument.
    Keywords: immigration, citizenship, methodology
    JEL: J61 J68 F22
    Date: 2006–10
  7. By: Tatiana Kluvánková-Oravská (Slovak Academy of Sciences, Bratislava Institute for Forecasting); Veronika Chobotová (University of Sussex, UK SPRU, The Freeman Centre, University of Sussex Falmer, Brighton BN1 9QE UK)
    Abstract: This paper explores the role of social capital and governance in rural development within Slovensky Raj National Park. Based on the theory of Common Pool Resources and Network Governance, the case study explores the external and internal influences on cooperation. Current decision making in the Park is still affected by post socialist relations. In particular inefficient institutional design and non-robust governance of the resources have resulted in over-exploitation of natural resources and treating common property as open-access. On one hand, evidence emerged on domination of interpersonal trust and failure of institutional design. These were found as barriers for the National Park to be viewed by various actors as an asset. On the other hand, municipal and tourism networks show that cooperation is gradually moving from being externally to internally driven, while displaying characteristics of bottom-up development. A hierarchical governance structure is thus slowly opening up, shifting towards networks.
    Keywords: social capital, trust, governance, cooperation, common pool resources, Slovakia, national parks, transition
    JEL: P21 P28 R58 Z13
    Date: 2006–06
  8. By: Jorge Rivera (The George Washington University School of Business); Bryan W. Husted (Tecnológico de Monterrey and Instituto de Empresa); David B. Allen (Instituto de Empresa)
  9. By: Kvaløy, Ola (Norsk hotellhøgskole, Institutt for økonomi og ledelse, University of Stavanger); Olsen, Trond E. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)
    Abstract: We analyze a repeated principal-agent trust game where the principal makes a specific investment by paying the agent up-front, expecting an agreed upon quality level in return. The verifiability of the agent’s action is endogenously determined by the principal’s investment in writing an explicit contract. Since verification is not certain, explicit contracting is insufficient, and the parties must engage in relational (implicit) contracting. First, we analyze how variations in trust (the discount factor) affect the contract equilibrium. Interestingly, we find that more trust may lead to lower levels of specific investments. This occurs when the surplus from trust is realized mainly through lower explicit contract costs. Second, we extend the literature on the interaction between explicit and relational governance by analyzing how variations in verification technology affect contract equilibrium. Since verification technology determines the cost necessary to achieve a given probability of verification, this analysis can also explain interesting aspects of legal systems.
    Keywords: Trust; Relationship Specific Investments; Relational Contracts; Endogenous Verifiability
    JEL: J41
    Date: 2004–12–29
  10. By: Christopher H. Wheeler; Elizabeth A. La Jeunesse
    Abstract: Human capital tends to have significant external effects within local markets, increasing the average income of individuals within the same metropolitan area. However, evidence on both human capital spillovers and peer effects in neighborhoods suggests that these effects may be confined to relatively small areas. Hence, the distribution of income gains from average levels of human capital should depend on how that human capital is distributed throughout a city. This paper explores this issue by documenting the extent to which college graduates are residentially segregated across more than 165000 block groups in 359 U.S. metropolitan areas over the period 1980-2000. Using three different metrics, we find that the segregation of college graduates rose between 1980 and 2000. We also find that cities which experienced larger increases in their levels of segregation also experienced larger increases in income inequality, although our results suggest that inequality and segregation likely influence each other.
    Keywords: Human capital ; Income distribution
    Date: 2006
  11. By: Sudipta Sarangi; Pascal Billand; Christophe Bravard
    Abstract: Heterogeneity in Nash networks can arise due to differences in the following four variables: (i) the value of information held by agents, (ii) the rate at which information decays or loses its value as it traverses the network, (iii) the prob- ability with which a links transmits information, and (iv) the cost of forming a link. In this paper we examine Nash networks, efficient networks and the existence of equilibrium networks under different heterogeneity conditions for the two-way flow model of networks.
  12. By: Robert Dur; Hein Roelfsema
    Abstract: We study the relation between formal incentives and social exchange in organizations where employees work for several managers and reciprocate to a manager's attention with higher effort. To this end, we develop a common agency model with two-sided moral hazard. We show that when effort is contractible and attention is not, the first-best can be achieved through bonus pay for both managers and employees. When neither effort nor attention are contractible, an `attention race' arises, as each manager tries to sway the employee's effort his way. While this may result in too much social exchange, the attention race may also be a blessing because it alleviates managers' moral-hazard problem in attention provision. Lastly, we derive the implications of these contract imperfections for the optimal number of managers that share one employee.
    Keywords: social exchange, reciprocity, incentive contracts, common agency, organizational design
    JEL: D86 J41 M50 M54 M55
    Date: 2006–11
  13. By: Beata S. Javorcik; Çaglar Özden; Mariana Spatareanu; Cristina Neagu
    Abstract: While there exists a sizeable literature documenting the importance of ethnic networks for international trade, little attention has been devoted to studying the effects of networks on foreign direct investment (FDI). The existence of ethnic networks may positively affect FDI by promoting information flows across international borders and by serving as a contract enforcement mechanism. This paper investigates the link between the presence of migrants in the US and US FDI in the migrants’ countries of origin, taking into account the potential endogeneity concerns. The results suggest that US FDI abroad is positively correlated with the presence of migrants from the host country. The data further indicate that the relationship between FDI and migration is driven by the presence of migrants with college education.
    Keywords: migration, foreign direct investment, ethnic networks
    JEL: F22 F23
    Date: 2006–11
  14. By: Elizabeth Stanton
    Abstract: Human Development Index (HDI) is a country-level measure of social welfare based on national values for average life expectancy, rates of adult literacy and school enrollment, and gross domestic product (GDP) per capita. Since HDI is based entirely on national averages it can provide only limited information about distribution within countries. The distribution of access to key resources is an important determinant of the affect of health, education and income on both individual well-being and on the aggregate well-being of a population as a whole. This paper makes a case for the importance of inequality to measuring social welfare; presents an original alternative to HDI that includes the distribution of health, education, and income in each country; and reports the results of this inequality-adjusted HDI for 46 countries.
    Keywords: Human Development, Inequality, Social Welfare, HDI
    JEL: I H O
    Date: 2006
  15. By: Rajeev, Meenakshi; Ranade, Ranjeet; Deb, Sarmistha
    Abstract: In the face of many debt-ridden farmers committing suicide, the agricultural credit delivery system assumes a significant role in the agrarian economy of India. This paper looks at the credit delivery system in rural India on the basis of a field survey carried out in the State of West Bengal. Given the reality that access to formal sector credit is not smooth for the marginal farmers, the emergence of a trader class as a major source of credit for working capital (without demanding any collateral), appears to be beneficial for these poor farmers. Surprisingly, the repayment rates of the comparatively poorer farmers are found to be better than that of the financially better-off farmers. The paper constructs a game theoretic model to show how in the face of asymmetric information, necessity to build trust has led to this behaviour.
    Keywords: Key Words: Borrower; lender; trader; strategy
    JEL: Q14
    Date: 2006–11–01

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