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on Social Norms and Social Capital |
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Issue of 2007‒01‒28
thirteen papers chosen by Fabio Sabatini Universita degli Studi di Roma, La Sapienza |
| By: | Giacomo Pasini (Department of Economics, University Of Venice Cà Foscari, Economics and Organization, School for Advanced Studies in Venice); Giovanni Millo (Research Department, Generali S.p.A.) |
| Abstract: | We study is the effect of moral hazard involved in non market contracts on the demand for marketed contracts. We extend Arnott and Stiglitz model on the coexistence of market and non-market insurance contracts to allow for the presence of Social Capital as a determinant of the severity of moral hazard in informal contracts. We provide a rigorous definition of Social Network and Social Capital by means of an equilibrium concept typical of the Network literature. Such a formal approach gives us a clear guidance for measuring Social Capital and validate the model on empirical data. The model is estimated on a panel dataset, supporting our claim that Social Capital increases the demand for non-life insurance. We test for the presence of spatial correlation, and conclude that the spatial structure of demand for non-life insurance contracts is completely determined by the spatial distribution of Social Capital. |
| Keywords: | Insurance, Social Capital, Network stability, Spatial Panel data model |
| JEL: | C21 D85 G22 Z13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:59_06&r=soc |
| By: | Paolo Buonanno (Department of Economics, University of Bergamo); Daniel Montolio (Department of Economics, Universitat de Barcelona); Paolo Vanin (Department of Economics, University of Padua) |
| Abstract: | We investigate the effects of civic norms and associational networks on crime rates. Through their impact on trust and economic development, civic norms may raise the expected returns to crime, but they may also increase its opportunity cost and the feelings of guilt and shame attached to it. Associational networks may increase returns to non-criminal activities and raise detection probabilities, but they may also provide communication channels for criminals. The empirical assessment of these effects poses serious problems of endogeneity, omitted variables and measurement error. Italy’s great variance in social and economic characteristics, its homogeneity in policies and institutions, and the availability of historical data on social capital in its regions allow us to minimise the first two problems. To tackle the third one, we exploit high and stable report rates for some forms of property crime. Once we address these problems, we find that both civic norms and associational networks have a negative and significant impact on property crimes across Italian provinces. |
| Keywords: | Civic norms, Associational networks, Property crime, Italy |
| JEL: | A14 K42 Z13 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:brg:wpaper:0605&r=soc |
| By: | Luca Zarri (Corresponding author, Dipartimento di Scienze economiche (Università di Verona)) |
| Keywords: | Non-cooperative Games, Happiness, Morality. |
| JEL: | B41 C72 C91 D64 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:37&r=soc |
| By: | Celen, Bogachan (Columbia GSB); Hyndman, Kyle (SMU) |
| Abstract: | This paper provides an experimental test of a theory of endogenous network forma- tion. A group of subjects face a decision problem under uncertainty. The subjects are endowed with a private information about the fundamentals of the problem, and they are supposed to make a decision one after the other. The key feature of the experiment is that a subject can observe the decisions of the preceding subjects by forming links. A link is costly, yet it enables a subject to observe previous decisions of those to whom he is linked. We show that subjects respond to changes in the information structure and the cost of link formation in the expected manner. However, we also show that behavior systematically deviates from the Bayesian benchmark as subjects form more links than theory predicts. Subjects also exhibit a tendency to conform rather than follow their own information. In order to explain this pattern, we provide an econo- metric model that posits that subjects care about their relative standing in the group. We show that the modified model provides a better fit than a standard QRE. |
| Keywords: | Social learning, social interaction, networks, network formation. |
| JEL: | A14 C73 C91 C92 D8 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:0701&r=soc |
| By: | Robert Dur (Erasmus Universiteit Rotterdam); Hein Roelfsema (Utrecht University) |
| 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 optimal organizational design. |
| Keywords: | social exchange; reciprocity; incentive contracts; common agency; organizational design |
| JEL: | D86 J41 M50 M54 M55 |
| Date: | 2006–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20060111&r=soc |
| By: | Sahin, Mediha (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Nijkamp, Peter; Baycan-Levent, Tuzin |
| Abstract: | With the advent of the era of mass migration in Europe, the issue of cultural diversity (CD ) has gained increasing social and political interest. There is a changing and often contradictory relationship between immigration, the increasing CD as a result of migration, and the development of global cities as desirable places to live and to work. Of special interest here are the SMEs (Small and Medium-sized Enterprises), which are often owned by migrants. Native and migrant entrepreneurs tend to differ in terms of their commercial opportunities, their business features, management styles, networks and associations, and market niches obtained in cities. The aim of this paper is to explore and review differences in entrepreneurial attitude both between natives and migrants and within migrant groups, and to explain these differences by means of distinct social and cultural indicators (derived from the cultural backgrounds of the entrepreneurs concerned) on the basis of a sample in the Netherlands. |
| Keywords: | Entrepreneurship; Cultural diversity; Netherlands |
| JEL: | M13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2006-21&r=soc |
| By: | Kristen, Cornelia; Granato, Nadia (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "With the German Microcensus we study the second generation's educational attainment in Germany focusing on the descendants of classic labour migrants. Our results show that educational outcomes in terms of attending or completing the highest schooling track leading to the Abitur considerably vary among different ethnic groups. Second generation young adults, in particular Turks and Italians, experience pronounced disadvantages in comparison to their German peers. The central question in this context is to what extent ethnic stratification in the German school system is related to educational and social background. Our findings suggest that ethnic disadvantages primarily result from social rather than from specific ethnic inequalities, since initial differences in the chances of attaining the Abitur disappear after considering educational and social origin, the only exception being Italian young adults." (author's abstract, IAB-Doku) ((en)) |
| JEL: | I21 J61 J62 |
| Date: | 2007–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200704&r=soc |
| By: | Constantine Manasakis (Department of Economics, University of Crete, Greece); Evangelos Mitrokostas (Department of Economics, University of Crete); Emmanuel Petrakis (Department of Economics, University of Crete, Greece) |
| Abstract: | This paper studies firms owners' incentives to engage in Corporate Social Responsibility (CSR) activities in an oligopolistic market, in a strategic delegation and vertical product differentiation context. Firms' owners have the opportunity to hire "socially responsible" managers and delegate to them CSR effort and market competition decisions. In equilibrium, both owners employ socially responsible managers. The strategic behavior of owners to hire socially responsible managers increases both output and profits. The societal consequences of Corporate Social Responsibility are also discussed. |
| Keywords: | Oligopoly; Vertical Product Differentiation; Corporate Social Responsibility; Strategic Managerial D |
| JEL: | L15 L22 M14 |
| Date: | 2006–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:crt:wpaper:0707&r=soc |
| By: | Judith Hellerstein (Department of Economics, University of Maryland); David Neumark (Department of Economics, University of California-Irvine) |
| Abstract: | We study workplace segregation in the United States using a unique matched employer-employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and since skill is often correlated with race and ethnicity we assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity. We define segregation based on the extent to which workers are more or less likely to be in workplaces with members of the same group, and we measure segregation as the observed percentage relative to maximum segregation. Our results indicate that there is considerable segregation by education and language in the workplace. Among whites, for example, observed segregation by education is 17% (of the maximum), and for Hispanics, observed segregation by language ability is 29 percent. Racial (black-white) segregation in the workplace is of a similar magnitude to education segregation (14%), and ethnic (Hispanic-white) segregation is somewhat higher (20%). Only a tiny portion (3%) of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace (32 percent) can be attributed to differences in language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same language |
| Keywords: | Segregation; Language; Skill; Race; Ethnicity |
| JEL: | J15 J16 J24 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:060710&r=soc |
| By: | Santiago Sanchez-Pages; Marc Vorsatz |
| Abstract: | We analyze experimentally two sender-receiver games with conflictive preferences. In the first game, the sender can choose to tell the truth, to lie, or to remain silent. The latter strategy is costly and similar to an outside option. If sent, the receiver can either trust or distrust the sender’s message. In the second game, the receiver must decide additionally whether or not to costly punish the sender after having observed the history of the game. We investigate the existence of two kinds of social preferences: Lie-aversion and preference for truth-telling. In the first game, senders tell the truth more often than predicted by the sequential equilibrium concept, they remain silent frequently, and there exists a positive correlation between the probability of being truthful and the probability of remaining silent. Our main experimental result for the extended game shows that those subjects who punish the sender with a high probability after being deceived are precisely those who send fewer but more truthful messages. We then explore two formal models of the baseline game that can account for our experimental results. First, we fit the data to the logit agent quantal response equilibrium; secondly, we solve for the Perfect Bayesian Nash equilibria of a stylized version of the baseline game with two types of senders. The equilibrium predictions obtained in both cases are consistent with both preferences for truth-telling and lie-aversion although the latter seems to be more pronounced. |
| Keywords: | Experiment, Lie-Aversion, Social Preferences, Strategic Information Transmission, Truth-Telling. |
| JEL: | C72 C73 D83 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:155&r=soc |
| By: | Bertocchi, Graziella; Strozzi, Chiara |
| Abstract: | We investigate the origin and evolution of the legal institution of citizenship from a political economy perspective. We compile a new data set on citizenship laws across countries of the world which documents how these institutions have evolved in the postwar period. We show that, despite a persistent impact of the original legislation, they have responded endogenously and systematically to a number of economic determinants, such as migration, the size of government, and the demographic structure of the population. Overall, a large stock of migrants decreases the probability of adoption of a mix of jus soli and jus sanguinis provisions, while it pushes jus sanguinis countries toward the adoption of jus soli elements. The welfare burden proves not to be an obstacle for a jus soli legislation, while demographic stagnation encourages the adoption of mixed and jus soli regimes. We also gauge the potential role of legal, political and cultural determinants, and find that a jus sanguinis origin is a factor of resistance to change, that a high degree of democracy promotes the adoption of jus soli elements while the instability of state borders associated with decolonization impedes it, and that cultural factors have no impact. |
| Keywords: | borders; citizenship laws; democracy; international migration; legal origins |
| JEL: | F22 K40 O15 P16 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6066&r=soc |
| By: | Andrew E. Clark; Paul Frijters; Michael A. Shields (National Centre for Econometric Research) |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:qut:auncer:2006-5&r=soc |
| By: | Floris Heukelom (ASE, Universiteit van Amsterdam) |
| Abstract: | Kahneman and Tversky and their behavioral economics stand in a long tradition of applying mathematics to human behavior. In the seventeenth century, attempts to describe rational behavior in mathematical terms run into problems with the formulation of the St. Petersburg paradox. Bernoulli’s celebrated solution to use utility instead of money marks the beginning of expected utility theory (EUT). Bernoulli’s work is taken up by psychophysics which in turn plays an important role in the making of modern economics. In the 1940s von Neumann and Morgenstern throw away Bernoulli and psychophysics, and redefine utility in monetary terms. Relying on this utility definition and on von Neumann and Morgenstern’s axiomatic constraints of the individual’s preferences, Friedman and Savage attempt to continue Bernoulli’s research. After this fails economics and psychology go separate ways. Economics employs Friedman’s positive-normative distinction; psychology uses Savag! e’s normative-descriptive distinction. Using psychophysics Kahneman and Tversky broaden the normative-descriptive distinction and argue with increasing strength for a descriptive theory of rational behavior. A prominent part of contemporary behavioral economics is founded upon the export of Tversky and Kahneman’s program to economics. Within this research, two different branches of research can be observed. One branch continues Kahneman and Tversky’s search for a descriptive theory of rational behavior and extends the normative-descriptive distinction with a prescriptive part. A second branch takes Tversky and Kahneman’s work as a falsification of positive economics. It argues that economics should take account of the psychological critique but stick to rigorous mathematical model building and Friedman’s positive-normative distinction. |
| Keywords: | Kahneman and Tversky; behavioral economics; expected utility theory; normative economics |
| JEL: | A12 B21 D01 |
| Date: | 2007–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070003&r=soc |