nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒02‒17
twenty-two papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Entrepreneurship Capital: A Regional, Organizational, Team, and Individual Phenomenon By David Audretsch; Erik Monsen
  2. Personal Autonomy in Trust-Based Interactions. An Experimental Analysis By Matteo Ploner
  3. Identity, Cooperation, and Punishment By Kendra N. McLeish; Robert J. Oxoby
  4. Asymmetric Enforcement of Cooperation in a Social Dilemma By Nikos Nikiforakis; Hans-Theo Normann; Brian Wallace
  5. Methodological interactionism: theory and application to the firm and to the building of trust By Nooteboom,Bart
  6. The role of culture in coping with uncertainty By Nardon, L.
  7. New Zealand Regions, 1986-2001: Dependency and Development of Social Capital By Ian Pool; Sandra Baxendine; William Cochrane; James Lindop
  8. Capital émotionnel et genre : ce capital qui fait aussi la différence entre les filles et les garçons à l'école et au travail. By Bénédicte Gendron
  9. Identity, Dignity and Taboos: Beliefs as Assets By Roland Bénabou; Jean Tirole
  10. Intra and Inter-Organizational Knowledge Transfer Processes: Identifying the Missing Links By Markus C. Becker; Mette Præst Knudsen
  11. Beyond economic criteria: A humanistic approach to organizational survival By Rosanas, Josep M.
  12. Happiness and Domain Satisfaction: Theory and Evidence By Richard A. Easterlin; Onnicha Sawangfa
  13. Intellectual evolution of strategic management and its relationship with ethics and social responsibility By Melé, Domenec; Guillen, Manuel
  14. Do Voters Vote Sincerely? Second Version By Arianna Degan; Antonio Merlo
  15. Peer Effects in European Primary Schools: Evidence from PIRLS By Ammermüller, Andreas; Pischke, Jörn-Steffen
  16. Peer Effects, Unobserved Factors and Risk Behaviours: An Analysis of Alcohol Abuse and Truancy among Adolescents By Rosa Duarte; José-Julián Escario; José-Alberto Molina
  17. Conformism and Social Connections: An Empirical Analysis of Self-Commitment to Food Purchase By Matteo Ploner
  18. Minimal group identity and gender in ultimatum games By Camille Chaserant
  19. Skill Uncertainty and Social Inference By Robert J. Oxoby
  20. Does Education Matter in Patience Formation? Evidence from Ugandan Villages By Michal Bauer; Julie Chytilová
  21. Cooperation, Competition, and Risk Attitudes: An Intergenerational Field and Laboratory Experiment By Gary Charness; Marie-Claire Villeval
  22. Italian Asset Managers’ Behavior: Evidence on Overconfidence, Risk Taking and Gender By Beckmann, Daniela; Lütje, Torben; Rebeggiani, Luca

  1. By: David Audretsch; Erik Monsen
    Abstract: We review the role entrepreneurship capital in regional economic performance and extend it to explain the economic and entrepreneurial performance of organizations, teams, and individuals. Drawing on entrepreneurship and social capital research, we demonstrate that researchers at different level of analysis are in fact modeling the same underlying multi-level concept: entrepreneurship capital. We identify elements of entrepreneurship capital at and across the levels. Where there are gaps, we suggest new directions for research, public policy, and management practice that focus on enhancing organizational, interpersonal, and personal factors which promote entrepreneurial action at and across regional, organizational, team, and individual levels.
    Keywords: Entrepreneurship, Social Capital, Multilevel
    Date: 2007–02
  2. By: Matteo Ploner
    Abstract: The paper experimentally investigates the interactions between restrictions to personal autonomy and reciprocity in a Principal-Agent relationship. Previous experimental contributions have shown that actions aimed at restricting decisional autonomy are likely to reduce reciprocity in trust- based relationships. Results in our experiment, which is a modified version of the Investment Game, differ from previous findings and conform more to standard economic predictions. Principals in our interaction do not support the self-determination of agents. On the other side, agents do not show any positive reciprocity when allowed to freely determine their behavior in the game. (This is an updated version of the CEEL Working Paper 2-05)
    Keywords: Principal-Agent relationship, Trust, Reciprocity, Self-Determination, Incentives
    JEL: C72 C91 D23 M50
    Date: 2007
  3. By: Kendra N. McLeish (University of Calgary); Robert J. Oxoby (University of Calgary and IZA)
    Abstract: Among economists, there is increased recognition of the role individuals’ identities play in decision-making. In this paper, we conduct laboratory experiments in which we explore the motivations for and the effects of group identity. We find that negative out-group opinion (acting as an inter-group identity threat) can motivate in-group/out-group effects in a simple bargaining context. Further, our results suggest that disparagement of group norms by members of the in-group (acting as an intra-group identity threat) increases the use of costly punishment within the in-group.
    Keywords: identity, fairness, reciprocity, experiments
    JEL: C9 D1 M5
    Date: 2007–01
  4. By: Nikos Nikiforakis; Hans-Theo Normann; Brian Wallace
    Abstract: The imposition of sanctions is one of the most common means of enforcing cooperation in decentralized interactions. Typically, agents are asymmetric in the sense that each has a different sanctioning power. Using a public-good experiment we analyze such a decentralized punishment institution in which agents are asymmetric. The asymmetric punishment institution prevents the decay of cooperation towards the non-cooperative equilibrium level. Strong agents contribute less to the public good, but punish more than weak agents. At the aggregate level, we observe remarkable similarities between outcomes in asymmetric and symmetric punishment institutions.
    Keywords: asymmetry, decentralized punishment, public good, punishment effectiveness
    JEL: C92 D70 H41
    Date: 2007
  5. By: Nooteboom,Bart (Tilburg University, Center for Economic Research)
    Abstract: Recent insights from the 'embodied cognition' perspective in cognitive science, supported by neural research, provide a basis for a 'methodological interactionism' that transcends both the methodological individualism of economics and the methodological collectivism of (some) sociology, and is consistent with insights from social psychology. It connects with a Mengerian exchange perspective and Hayekian view of dispersed knowledge from Austrian economics. It provides a basis for a new, unified social science that integrates elements from economics, sociology, social psychology and cognitive science. This paper discusses the roots of this perspective, in theory of cognition and meaning, and illustrates its application in a summary of a social-cognitive theory of the firm and an analysis of processes by which trust is built up and broken down.
    Keywords: methodology;philosophy of economics;theory of the firm;trust
    JEL: A14 D01 D21 D63 D74 L22 M14 Z13 B25
    Date: 2007
  6. By: Nardon, L.
    Abstract: This paper builds on prior cross-cultural research to explore the role of national culture in providing mechanisms to cope with uncertainty. The concept of uncertainty is critical to organization and management theories, and has been central in explaining the relationship between organizations and their environment. The cross-cultural literature suggests that people perceive and deal with uncertainty differently across cultures. This paper extends this literature by empirically testing the role of culture in providing managers with mechanisms to cope with uncertainty in Brazil and the United States. Results suggest that beliefs about control over the environment and rule orientation influence the choice of coping mechanisms employed across countries. Implications for theory and practice are discussed.
    Keywords: uncertainty, coping with uncertainty, uncertainty avoidance, national culture, content analysis, cross-cultural management
    Date: 2006–10–04
  7. By: Ian Pool (University of Waikato); Sandra Baxendine (Waikato District Health Board); William Cochrane (University of Waikato); James Lindop (University of Waikato)
    Abstract: The development of social capital is significantly affected by benefit dependency of the population. This paper investigates measures of social cohesion and measures of dependency on society across the regions of New Zealand. Some of the measures looked at specifically are social security benefit use and convictions, custodial sentences and the prison muster across regions. The paper also focuses on housing and specifically considers overcrowding.
    Keywords: Benefits, Overcrowding, Convictions, Regions, New Zealand
    JEL: I38 K42 R21 R23
    Date: 2006–03–05
  8. By: Bénédicte Gendron (Centre d'Economie de la Sorbonne et Céreq)
    Abstract: Education participates to the social reproduction of gender and gender roles in the society. Does the origin of the inequalities between females and males start here ? Does girls education similar to that of boys ? If number of research has shown differences in female and male human capital endowment, especially regarding knowledge (savoir), know-how or skills (savoir-faire), still few researches have been stressing the impact of emotional competencies differences referring to personal skills or savoir-être. The traditional share between cognitive and affect domains impeded to measure the place taken by the “savoir-être” in training and individual construction and its impact on their future. In this article, we take into account the impact of gendered education on the development of females and males emotional capital. This latter can explain boys and girls differences regarding school performance and vocational guidance.
    Keywords: Emotional capital, boys, girls, gender, gender education, guidance, school performance.
    JEL: I29 J16
    Date: 2006–12
  9. By: Roland Bénabou (Princeton University, NBER, CEPR and IZA); Jean Tirole (Université de Toulouse and MIT)
    Abstract: We analyze social and economic phenomena involving beliefs which people value and invest in, for affective or functional reasons. Individuals are at times uncertain about their own "deep values" and infer them from their past choices, which then come to define "who they are". Identity investments increase when information is scarce or when a greater endowment of some asset (wealth, career, family, culture) raises the stakes on viewing it as valuable (escalating commitments). Taboos against transactions or the mere contemplation of tradeoffs arise to protect fragile beliefs about the "priceless" value of certain assets (life, freedom, love, faith) or things one "would never do". Whether such behaviors are welfareenhancing or reducing depends on whether beliefs are sought for a functional value (sense of direction, self-discipline) or for "mental consumption" motives (self-esteem, anticipatory feelings). Escalating commitments can thus lead to a "hedonic treadmill", and competing identities cause dysfunctional failures to invest in high-return activities (education, adapting to globalization, assimilation), or even the destruction of productive assets. In social interactions, norm violations elicit a forceful response (exclusion, harassment) when they threaten a strongly held identity, but further erode morale when it was initially weak. Concerns for pride, dignity or wishful thinking lead to the inefficient breakdown of Coasian bargaining even under symmetric information, as partners seek to self-enhance and shift blame by turning down "insultingly low" offers.
    Keywords: identity, self-serving beliefs, self-image, memory, wishful thinking, anticipatory utility, self control, hedonic treadmill, bargaining, taboos, religion
    JEL: D81 D91 Z13
    Date: 2007–01
  10. By: Markus C. Becker; Mette Præst Knudsen
    Abstract: Inspired by the resource- and knowledge-based views, much attention has been focused on knowledge transfer as a process of strategic importance. Still, many open questions regarding knowledge transfer processes need to be addressed to complete our understanding. For instance, what are the barriers to knowledge transfer, and what are the facilitators? A review of the literature reveals that it is divided into two streams: articles on intra-firm knowledge flows and articles on inter-firm knowledge flows. Part of the incompleteness of our understanding of knowledge transfer processes, we argue, derives from the fact that it is unclear in which way intra- and inter-firm knowledge flows are different. The paper investigates three questions: first, how knowledge transfer is defined differently in intra- and inter-firm knowledge flows; second: how barriers to knowledge transfer processes differ; and thirdly: what we need to know to be able to formulate a management view of organizational knowledge flows, whether intra- or inter-organizational. The concluding section argues five research questions whose answers may enable research to formulate a management view of knowledge flows.
    Keywords: Review; internal knowledge flows; external knowledge flows; definition; barriers to knowledge flows
    JEL: D83 L20 L22 O32
    Date: 2006
  11. By: Rosanas, Josep M. (IESE Business School)
    Abstract: There are many, often mutually inconsistent, theories about organizations that explain organizational phenomena to the same, limited extent. Most of them ignore the ethical dimension completely. In this paper we propose the basic principles for a theory of decision-making in organizations that has ethics at its core. This theory is based on the work of Juan Antonio Pérez López (1991, 1993) and is essentially a humanistic view of the interrelationships between people and their implications for organizational decision-making. First, we show how, in any interrelationship between two people, what each person learns is crucial to the future of the relationship. We then consider the different aspects of what each person learns. Second, we apply the preceding analysis to the organizational context, as a guide to organizational decision making, and show how any decision in an organization needs to be analyzed in terms of three criteria: short-run effectiveness, development of distinctive competence, and unity and identification of employees with the organization.
    Keywords: business ethics; ethical foundations of organization; trust; management theory; learning;
    Date: 2006–10–13
  12. By: Richard A. Easterlin (University of Southern California and IZA); Onnicha Sawangfa (University of Southern California)
    Abstract: In the United States happiness, on average, varies positively with socio-economic status; is fairly constant over time; rises to midlife and then declines; and is lower among younger than older birth cohorts. These four patterns of mean happiness can be predicted rather closely from the mean satisfaction people report with each of four domains - finances, family life, work, and health. Even though the domain satisfaction patterns typically differ from each other and from that for happiness, they come together in a way that explains quite well the overall patterns of happiness. The importance of any given domain depends on the happiness relation under study (by socio-economic status, time, age or birth cohort), and no single domain is invariably the key to happiness.
    Keywords: happiness, domain satisfaction, subjective well-being
    JEL: I3 D60 D1 O51
    Date: 2007–01
  13. By: Melé, Domenec (IESE Business School); Guillen, Manuel (University of Valencia)
    Abstract: The main purpose here is to present an overview of the historical development of strategic management, through a critical review of the most relevant theoretical proposals, and to consider its links to ethics and corporate social responsibilities. From the very beginning of strategic management thought attempts have been made to fuse ethical aspects such as values of senior management or social values or social expectations to strategic management. More recently the stakeholder view of the firm has permitted the introduction of ethical theories into strategic management, and the resources-based view of the firm has lead to the consideration of competences, including moral virtues. Here it is argued that in spite of some advances, the integration of ethics into strategic management is not yet entirely satisfactory. Thus, it is suggested that new directions to focus the integration of ethics and strategic management are necessary.
    Keywords: Strategic management; Integrating ethics in management; Business ethics; Corporate social responsibility;
    Date: 2006–10–15
  14. By: Arianna Degan (Département des sciences économiques, Université du Québec à Montréal); Antonio Merlo (Department of Economics, University of Pennsylvania)
    Abstract: In this paper we address the following question: To what extent is the hypothesis that voters vote sincerely testable or falsifiable? We show that using data only on how individuals vote in a single election, the hypothesis that voters vote sincerely is irrefutable, regardless of the number of candidates competing in the election. On the other hand, using data on how the same individuals vote in multiple elections, the hypothesis that voters vote sincerely is potentially falsifiable, and we provide general conditions under which the hypothesis can be tested. We then consider an application of our theoretical framework and assess whether the behavior of voters is consistent with sincere voting in U.S. national elections in the post-war period. We find that by and large sincere voting can explain virtually all of the individual-level observations on voting behavior in presidential and congressional U.S. elections in the data.
    Keywords: voting, spatial models, falsifiability, testing.
    JEL: D72 C12 C63
    Date: 2006–03–01
  15. By: Ammermüller, Andreas; Pischke, Jörn-Steffen
    Abstract: We estimate peer effects for fourth graders in six European countries. The identification relies on variation across classes within schools. We argue that classes within primary schools are formed roughly randomly with respect to family background. Similar to previous studies, we find sizeable estimates of peer effects in standard OLS specifications. The size of the estimate is much reduced within schools. This could be explained either by selection into schools or by measurement error in the peer background variable. When we correct for measurement error we find within school estimates close to the original OLS estimates. Our results suggest that the peer effect is modestly large, measurement error is important in our survey data, and selection plays little role in biasing peer effects estimates. We find no significant evidence of non-linear peer effects.
    Date: 2006
  16. By: Rosa Duarte (University of Zaragoza); José-Julián Escario (University of Zaragoza); José-Alberto Molina (University of Zaragoza and IZA)
    Abstract: The objective of this paper is to examine the factors which affect alcohol abuse and truancy among adolescents. We propose a new theoretical specification in which alcohol abuse and truancy appear as derived demands, given that they condition peer group and family acceptance, and we introduce unobserved individual effects that can influence both behaviours. Empirically, our paper develops an analysis where, after controlling for the existence of unobserved individual factors affecting both decisions, we test for peer influences. Our results first show evidence that alcohol abuse and truancy share unobserved factors affecting both decisions, and then confirm the existence of significant peer group influences on these two deviant behaviours.
    Keywords: peer, unobserved factors, risk behaviours, alcohol, truancy, bivariate probit
    JEL: I10 I12 I20 I21
    Date: 2007–01
  17. By: Matteo Ploner
    Abstract: Recent years registered a renewed interest in social interactions. However, due to some well-known identification problems, empirical estimation of peer effects remains quite problematic. To overcome problems of this kind, a database providing detailed information on the sequential structure of choices is analyzed. Observations refer to the deposit of money in a personal account devoted to the purchase of food at campus refectories. A clear tendency to conform to directly observed deposits is registered in the data. Furthermore, higher conformism is observed among mutually acquainted individuals.
    Keywords: Social interactions; Identification; Conformism; Social Proximity; Food Purchase
    Date: 2007
  18. By: Camille Chaserant
    Abstract: Social identity, or group membership, affects economic outcomes. However, this influence may differ according to the nature of the groups involved. Investigating the weakest group cohesion necessary to influence individual behaviors, we undertook three linked ultimatum game experiments involving a minimal categorization process. Three main results are presented here: (i) Belonging to a minimal group affects behaviors; (ii) Men and women differ systematically in the nature of this influence and (iii) The ‘label’ given to a minimal group is in itself not neutral.
    Keywords: Minimal group, ultimatum game, social identity, gender
    JEL: C91 A12 C99
    Date: 2006
  19. By: Robert J. Oxoby (University of Calgary and IZA)
    Abstract: Research in psychology indicates that individuals often make inferences regarding unknown individual qualities based on potentially irrelevant (but socially observable) information. This paper explores occupational choices when individuals receive imprecise signals regarding ability and use the observable characteristics of previously successful individuals to infer own ability. Individuals who fail to observe successful predecessors of their same type may underestimate their potential for success in the occupation. We discuss the role of these biases in light of the literature on affirmative action and firm incentives.
    Keywords: social Inference, occupational choice, discrimination
    JEL: D63 D83 J64 J70
    Date: 2007–01
  20. By: Michal Bauer (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Julie Chytilová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: The paper aims to contribute to the understanding of why there is a lack of domestic saving and investment in rural parts of sub-Saharan Africa. It focuses on heterogeneity in inter-temporal preferences as a possible explanation of this important puzzle. The study is based on a unique experimental data set collected from 856 respondents in Ugandan villages and scrutinizes how individual patience – measured by the discount rate – is formed. The results suggest that Ugandan respondents are substantially less patient than their counterparts in similar experimental studies undertaken in developed countries and South Asia. We find a strong negative association between the level of education and the individual discount rate. Furthermore, we took advantage of the Ugandan education reform in 1996 and varying school frequency to demonstrate the causal relationship stemming from education to patience. The estimates suggest that an additional year at school decreases the discount rate on average by 35 percentage points after controlling for other characteristics (age, income group, sex, marital status and clan linkage). Our findings strongly accord with patience understood as a non-cognitive ability which needs to be taught by parents, learnt at school and promoted by social norms. The Ugandan responses, therefore, propose a new way in which education may influence development in sub-Saharan Africa – by shaping individual patience.
    Keywords: Time preference; patience; discount rate; education; savings; economic development; field survey; sub-Saharan Africa
    JEL: C93 D91 O12
    Date: 2007–02
  21. By: Gary Charness (University of California, Santa Barbara); Marie-Claire Villeval (CNRS-GATE and IZA)
    Abstract: The population of most developed societies is ‘graying’. As life expectancy increases and the large baby-boom generation approaches retirement age, this has critical consequences for maintaining a high standard of living and the sustainability of pension systems. In the light of these labor-force and social concerns, we consider experimentally the comparative behavior of juniors (under 30) and seniors (over 50) in both experiments conducted onsite with the employees of two large firms and in a conventional laboratory environment with students and retirees. Our results are compelling. First, seniors are not more risk-averse, as opposed to the conventional stereotype. Second, both juniors and seniors react to the competitiveness of the environment and there is no significant difference in performance in the real-effort task across the generations when they are competing. Third, seniors are typically more cooperative than juniors in a team-production game. Cooperation is highest in groups in which there is a mix of juniors and seniors, suggesting that there are indeed benefits in maintaining a work force with diversity in age. Overall, the implication is that it is beneficial to define additional short-term incentives near the end of the workers’ career to motivate and to retain older workers. A secondary, but important, issue is the external validity of conventional laboratory experiments. In general we do not find strong differences in behavior between workers and non-workers, indicating that laboratory experiments may not be such a bad approximation for the field environment.
    Keywords: age, performance, labor market, discrimination, diversity, stereotypes, experiments
    JEL: A13 B49 C91 C93 J14 J18 J38 J70
    Date: 2007–01
  22. By: Beckmann, Daniela; Lütje, Torben; Rebeggiani, Luca
    Abstract: This paper offers new insights into the Italian mutual fund industry. Surveying Italian professionals, we do not only reveal typical gender differences but also detect divergence to their German counterparts. While disclosing Italian professionals’ overly positive self-assessment in general, we find evidence for male overconfidence in particular though without being accompanied by excessive control illusion of the own information level. Asset managers’ risk taking reveals further differences: Italian female professionals do not only assess themselves as more risk averse than their male colleagues, they also prefer a more passive portfolio management compared to the level they are allowed to. Moreover, in a tournament scenario near the end of the investment period female asset managers do not try to become the ultimate top performer when they have outperformed their peer group so far. However, in case of underperformance, the risk of deviating from the benchmark makes especially female professionals willing to seize a chance of catching up. Overall, compared to their German counterparts, we find Italian asset managers to be slightly more risk averse. Matching bounded former results on Italian mutual funds, we discuss interdependencies as well as impact of our findings at the individual asset managers’ level on trading activity, management style and performance.
    Keywords: Institutional investors, Gender, Overconfidence, Risk taking, Tournament behavior
    JEL: G23 G14 J16
    Date: 2007–02

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