nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒07‒13
twelve papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Religion and Entrepreneurship By Audretsch, David B; Bönte, Werner; Tamvada, Jagannadha Pawan
  2. Parochial Politics: Ethnic Preferences and Politician Corruption By Banerjee, Abhijit; Pande, Rohini
  3. Voting on a sharing norm in a dictator game By Christoph Vanberg
  4. Social Memory and Evidence from the Past By Luca Anderlini; Dino Gerardi; Roger Lagunoff
  5. Information Aggregation and Beliefs in Experimental Parimutuel Betting Markets By Frederic Koessler; Charles Noussair; Anthony Ziegelmeyer
  6. The Localization of Entrepreneurship Capital - Evidence from Germany By David B. Audretsch; Max Keilbach
  7. The Entrepreneurship-Philanthropy Nexus: Nonmarket Source of American Entrepreneurial Capitalism By Zoltan J. Acs; David Audretsch; Ronnie J. Phillips; Sameeksha Desai
  8. When money does not buy happiness: the case of “frustrated achievers” By BECCHETTI LEONARDO; ROSSETTI FIAMMETTA
  9. Informatization, Voter Turnout and Income Inequality By Ryo Arawatari
  10. Estimating Peer Effects in Swedish High School using School, Teacher, and Student Fixed Effects By Sund, Krister
  11. Participation and voting behavior in a direct democracy: a structural model of migration policy in Switzerland By Jaya Krishnakumar; Tobias Muller
  12. A Role for Cultural Transmission in Fertility Transitions. By Thomas Baudin

  1. By: Audretsch, David B; Bönte, Werner; Tamvada, Jagannadha Pawan
    Abstract: While considerable concern has emerged about the impact of religion on economic development, little is actually known about how religion impacts the decision making of individuals. This paper examines the influence of religion on the decision for people to become an entrepreneur. Based on a large-scale data set of nearly ninety thousand workers in India, this paper finds that religion shapes the entrepreneurial decision. In particular, some religions, such as Islam and Christianity, are found to be conducive to entrepreneurship, while others, such as Hinduism, inhibit entrepreneurship. In addition, the caste system is found to influence the propensity to become an entrepreneur. Individuals belonging to a backward caste exhibit a lower propensity to become an entrepreneur. Thus, the empirical evidence suggests that both religion and the tradition of the caste system influence entrepreneurship, suggesting a link between religion and economic behaviour.
    Keywords: caste-system; entrepreneurship; India; religion
    JEL: L26 Z12
    Date: 2007–07
  2. By: Banerjee, Abhijit; Pande, Rohini
    Abstract: This paper examines how increased voter ethnicization, defined as a greater preference for the party representing one's ethnic group, affects politician quality. If politics is characterized by incomplete policy commitment, then ethnicization reduces average winner quality for the pro-majority party with the opposite true for the minority party. The effect increases with greater numerical dominance of the majority (and so social homogeneity). Empirical evidence from a survey on politician corruption that we conducted in North India is remarkably consistent with our theoretical predictions.
    Keywords: Corruption; Ethnic Voting; India
    JEL: O12 P16
    Date: 2007–07
  3. By: Christoph Vanberg (Max Planck Institute of Economics, Jena, Germany.)
    Abstract: I conduct an experiment to assess whether majority voting on a non- binding sharing norm affects subsequent behavior in a dictator game. In a baseline treatment, subjects play a one shot dictator game. In a voting treatment, subjects are ï¬rst placed behind a 'veil of ignorance' and vote on the amount that those chosen to be dictators 'should' give. The outcome of the vote is referred to as a 'non-binding agreement.' The results show that a norm established in this fashion does not induce more 'fairness' on the part of those subsequently chosen to be dictators. In fact, dictators were signiï¬cantly more likely to offer nothing under the treatment. I outline a simple model to account for this 'crowding out' effect of a norm that may demand ‘too much’ of some subjects.
    Keywords: Dictator game, communication, voting, promises, agreements, behavioral economics, guilt aversion, reciprocity, fairness, obligations
    JEL: C91 C92 D63 D64 D70
    Date: 2007–07–06
  4. By: Luca Anderlini; Dino Gerardi; Roger Lagunoff (Department of Economics, Georgetown University)
    Abstract: Examples of repeated destructive behavior abound throughout the history of human societies. This paper examines the role of social memory --- a society's vicarious beliefs about the past --- in creating and perpetuating destructive conflicts. We examine whether such behavior is consistent with the theory of rational strategic behavior. We analyze an infinite-horizon model in which two countries face off each period in an extended Prisoner's Dilemma game in which an additional possibility of mutually destructive ``all out war'' yields catastrophic consequence for both sides. Each country is inhabited by a dynastic sequence of individuals who care about future individuals in the same country, and can communicate with the next generation of their countrymen using private messages. The two countries' actions in each period also produce physical evidence; a sequence of informative but imperfect public signals that can be observed by all current and future individuals. We find that, provided the future is sufficiently important for all individuals, regardless of the precision of physical evidence from the past there is an equilibrium of the model in which the two countries' social memory is systematically wrong, and in which the two countries engage in all out war with arbitrarily high frequency. Surprisingly, we find that degrading the quality of information that individuals have about current decisions may ``improve'' social memory so that it can no longer be systematically wrong. This in turn ensures that arbitrarily frequent all out wars cannot take place. Classification-JEL Codes: C72, C79, D80, D83, D89
    Keywords: Social Memory, Private Communication, Dynastic Games, Physical Evidence
  5. By: Frederic Koessler (THEMA (CNRS), Universite de Cergy-Pontoise,); Charles Noussair (Department of Economics, Faculty of Economics and Business Administration, Tilburg University); Anthony Ziegelmeyer (Max Planck Institute of Economics, Strategic Interaction Group)
    Abstract: We study sequential parimutuel betting markets with asymmetrically informed bettors, using an experimental approach. In one treatment, groups of eight participants play twenty repetitions of a sequential betting game. The second treatment is identical, except that bettors are observed by other participants who assess the winning probabilities of each potential outcome. In the third treatment, the same individuals make bets and assess the winning probabilities of the outcomes. A favorite-longshot bias is observed in the ï¬rst and second treatments, but does not exist in the third treatment. Information aggregation is better in the third than in the other two treatments, and contrarian betting is almost completely eliminated by the belief elicitation procedure. Making bets improves the accuracy of stated beliefs. We propose a theoretical model, the Adaptive Model, to describe individual behavior and we ï¬nd that it effectively explains betting decisions, especially in the third treatment.
    Keywords: Parimutuel betting, Information aggregation, Elicited beliefs, Experimental economics
    JEL: C72 C92 D82
    Date: 2007–07–06
  6. By: David B. Audretsch (Max Planck Institute of Economics, Jena, Germany; Indiana University, USA); Max Keilbach (Max Planck Institute of Economics, Jena, Germany)
    Abstract: Whereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force of economic growth. In this paper, we define a region's capacity to create new firms start-ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge-based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low-tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded.
    Keywords: Entrepreneurship capital, Local Clusters, Knowledge Spillovers, Spatial Econometrics
    JEL: L60 O30 G30
    Date: 2007–07–02
  7. By: Zoltan J. Acs (George Mason University); David Audretsch (Indiana University and Max Planck Institute of Economics, Jena); Ronnie J. Phillips (Kauffman Foundation and Colorado State University); Sameeksha Desai (George Mason University)
    Abstract: What differentiates American capitalism from all other forms of industrial capitalism is a historical focus on both the creation of wealth (entrepreneurship) and the reconstitution of wealth (philanthropy). Philanthropy has been part of the implicit American social contract that continuously nurtures and revitalizes economic prosperity. Much of the new wealth created historically has been given back to the community to build many of the great social institutions that have paved the way for future economic growth. This entrepreneurship-philanthropy nexus has not been fully explored by either economists or the general public. The purpose of this paper is to suggest that American philanthropists-particularly those who have made their own fortunes-create foundations that, in turn, contribute to greater and more widespread economic prosperity through knowledge creation. Analyzing philanthropy sheds light on our current understanding of how economic development has occurred, as well as the roots of American economic domi- nance.
    Keywords: entrepreneurship, philanthropy, capitalism, knowledge
    JEL: D64 M13 M14
    Date: 2007–07–02
    Abstract: An increase in real per capita income is generally expected to be associated with nonnegative variation in life satisfaction. The alternative (association with negative changes) is generally defined as “frustrated achievement” (Graham and Pettinato, 2002). We investigate the determinants of “frustrated achievement” in the German socioeconomic panel on more than 60,000 observations collected between 1992 and 2004. We observe, in correspondence of almost one third of yearly increases of (equivalised) real household income, a parallel reduction in self declared life satisfaction. Our econometric findings show that lack of full time job, health deterioration, relative income effects, marital status shocks and reduction of relational life are the main factors associated to this phenomenon.
    Date: 2007–05
  9. By: Ryo Arawatari (Graduate School of Economics, Osaka University)
    Abstract: In recent years, voter turnout has been decreasing in most industrial countries, and about 40% of all electors abstain from voting. This may affect income inequality and the GDP growth rate through a redistribution policy determined by majority voting. In this paper, we explore the reasons for this continuing decrease in voter turnout and assess its social costs. We conclude that informatization lowers voter turnout by generating an information overload, and that a decrease in voter turnout lowers GDP growth by limiting income redistribution.
    Keywords: Income inequality; Information; Informatization; Voter turnout; Voting
    JEL: D31 O15 P16
    Date: 2007–07
  10. By: Sund, Krister (Swedish Institute for Social Research, Stockholm University)
    Abstract: In this paper I use a rich dataset in order to observe each student over time in different subjects and courses. Unlike most peer studies, I identify the peers and the teachers that each student has had in every classroom. This enables me to handle the simultaneity and selection problems, which are inherent in estimating peer effects in the educational production function. I use a value-added approach with lagged peer achievement to avoid simultaneity and extensive fixed effects to rule out selection. To be specific, it is within-student across-subject variation with additional controls for time-invariant teacher characteristics that is exploited. Moreover, I identify students that are attending classes in which they have no peers from earlier education which otherwise could bias the result. I find positive peer effects for the average student but also that there is a non-linear dimension. Lower-achieving students benefit more from an increase in both mean peer achievement and the spread in peer achievement within the classroom than their higher-achieving peers.
    Keywords: Economics of education; Peer effects
    Date: 2007–05–07
  11. By: Jaya Krishnakumar; Tobias Muller
    Abstract: In this paper, we analyze the political economy of immigration policy in a direct democracy setting. We formulate a structural model of voting and participation behavior integrating instrumental and expressive motivations. The model is estimated using data drawn from a survey carried out after a vote in Switzerland in 2000 on a popular initiative proposing to implement immigration restrictions. The model enables us to recover estimates of participation costs and preferences towards immigration and analyze how these preferences are translated into actual political outcomes. The results reveal a substantial gap ("participation bias") between attitudes towards immigration in the general population and the outcome of the vote.
    Date: 2007–05
  12. By: Thomas Baudin (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I])
    Abstract: The paper proposes an economic and cultural mechanism that can predict a fertility transition and its timing. The cultural structure of the population is endogenously determined by a cultural evolution mechanism. The fertility rates reduction in the long run is always the result of an interaction between the cultural and economic structures of the society. Permanent productivity schocks have to distort sufficiently the cultural structure of the population to make acceptable modern behaviours (in term of fertility) to the traditionalist parents. An increase in the average income level provoked by the technological progress will be necessary but not sufficient condition to undergo a fertility transition. Finally, a fertility transition can always appear in the economy whathever the initial cultural structure but that cultural structure determines the timing of the transition.
    Keywords: Fertility, transition, preferences transmission, cultural evolution, endogenous fertility.
    Date: 2007–07–03

This nep-soc issue is ©2007 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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