nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒11‒10
fifteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Tax Compliance, Tax Morale And Governance Quality By Benno Torgler; Markus Schaffner; Alison Macintyre
  2. Mirror, Mirror on the Wall, who is the Happiest of Them All? By Benno Torgler; Nemanja Antic; Uwe Dulleck
  3. An Experimental Approach to Comparing Trust in Pastoral and Non-Pastoral Australia By Ryan R.J. McAllister; Andrew F. Reeson
  4. Impact of coherent versus multiple identities on knowledge integration By Willem, A.; Scarbrough, H.; Buelens, M.
  5. On the dynamics of knowledge generation and trust building in regional innovation networks. A multi method approach By Maria Daskalakis; Martina Kauffeld-Monz
  6. Another experimental look at reciprocal behavior: indirect reciprocity By Bonein Aurélie; Serra Daniel
  7. Online Peer-to-peer Communities: An Empirical Investigation of a Music Sharing Network as a Dynamic Two-sided Network By Bin Gu; Yun Huang; Wenjing Duan; Andrew B. Whinston
  8. Social Preferences on Public Intervention: an empirical investigation based on French Data By Romina Boarini; Christine Le Clainche
  9. Belief Formation and Evolution in Public Good Games. By Jaromir Kovarik
  10. Public Opinion Polls, Voter Turnout, and Welfare: An Experimental Study By Jens Großer; Arthur Schram
  11. The Hidden Costs of Control: An Unsuccessful Replication Study By Matteo Ploner; Anthony Ziegelmeyer
  12. Learning Unethical Practices from a Co-worker: The Peer Effect of Jose Canseco By Gould, Eric D; Kaplan, Todd
  13. Religion and Entrepreneurship By David B. Audretsch; Werner Boente; Jagannadha Pawan Tamvada
  14. Tax Evasion: Cheating Rationally or Deciding Emotionally? By Giorgio Coricelli; Mateus Joffily; Claude Montmarquette; Marie-Claire Villeval
  15. Trade with Heterogeneous Beliefs By Elchanan Ben-Porath

  1. By: Benno Torgler; Markus Schaffner; Alison Macintyre
    Abstract: Taxpayers are more compliant than the traditional economic models predict. Why? The literature calls it the “puzzle of tax compliance”. In this paper we use field, experimental and survey data to investigate the empirical evidence on whether presence of tax morale helps to resolve this puzzle. The results reveal a strong correlation between tax morale and tax evasion/compliance which confirms the value of taking the research a step further by looking at the determinants of tax morale. We explore this question with a particular focus on the importance of governance quality.
    Keywords: tax morale, tax compliance, tax evasion, institutional and governance quality, social capital.
    JEL: H26
    Date: 2007–10–17
  2. By: Benno Torgler; Nemanja Antic; Uwe Dulleck
    Abstract: This paper turns Snow-White’s magic mirror onto recent economics Nobel Prize winners, top economists and happiness researchers, and through the eyes of the “man in the street” seeks to determine who the happiest academic is. The study not only provides a clear answer to this question but also unveils who is the ladies’ man and who is the sweetheart of the aged. It also explores the extent to which information matters and whether individuals’ self-reported happiness affects their perceptions about the happiness of these superstars in economics.
    Keywords: happiness, subjective well-being, perceptions, superstars, economists
    JEL: A11 D10 I31
    Date: 2007–10–17
  3. By: Ryan R.J. McAllister; Andrew F. Reeson (CSIRO Sustainable Ecosystems, Australia)
    Abstract: It is generally held that rural Australians are more cooperative in character than their urban counterparts. To explore one aspect of this notion, we conducted an experiment which compared trust and trustworthiness among a sample of Australian senior high school students which included students with both pastoral and non-pastoral backgrounds. While student behaviour is unlikely to mimic adult behaviour, any significant differences between pastoral and non-pastoral students would suggest differences do exist between the social norms that guide pastoral and non-pastoral communities. We repeated our experiment at three different schools containing students from both pastoral and non-pastoral backgrounds, allowing us to draw comparisons. In total 78 students participated. Our experiments were based on similar experiments that have been applied across a range of contexts internationally (trust game/investment game). We did not find evidence of differences between students with pastoral and non-pastoral backgrounds, either in the level of trust in others or in trustworthiness, though our methods probably have a bias towards this conclusion. Our results concurred with other studies in showing that social distance is an important determinant of the level of cooperation.
    Keywords: rural urban relations, economic behaviour, culture, arid zones, semiarid zones, pastoral society
    JEL: R00 C91 P25 A13
    Date: 2007–09
  4. By: Willem, A.; Scarbrough, H.; Buelens, M. (Vlerick Leuven Gent Management School)
    Abstract: This paper addresses the influence of two competing views of social identity on knowledge integration within organizations. One view sees social identity primarily as a coherent characteristic of organisations, which can leverage knowledge integration by developing loyalty, trust, shared values and implicit norms (Kogut and Zander, 1996). The opposing view considers social identification as multiple and fragmented (Albert, Ashforth and Dutton, 2000; Alvesson, 2000). This fragmented view emphasises the problematic nature of social identity for knowledge integration. The aim of this paper is to examine these competing accounts and to develop insight under what conditions coherent respectively multiple social identities are advantageous for knowledge integration by the comparative analysis of two polar case studies. Our case studies reveal the different effects of a coherent versus multiple identity on knowledge integration and the need for a coherent company-wide social identity to leverage knowledge integration between organizational units.
    Keywords: case studies, knowledge integration, multiple identities, organization theory, organization-wide identity, social identity
    Date: 2007–11–08
  5. By: Maria Daskalakis (Department of Economics, University of Kassel); Martina Kauffeld-Monz (Department of Economics, University of Kassel)
    Abstract: Researchers in the field of innovation networks have acknowledged the important role knowledge and interaction play for the emergence of innovation. However, not much research has been done to investigate the behavioural dynamics necessary for the success of innovation networks. Our article deals with this issue in a threefold manner: we combine a theoretical analysis with an empirical validation and set up a multi-agent system based on both, simulating the behavioural dynamic of collaborative R&D. With regard to the theoretical foundation, the cognitive foundations of knowledge generation under bounded rationality are conceptualized. This is linked to a discussion about the role trust plays in the course of economic interaction. Trust itself proves to be a relevant mode of economic (inter)action which enables agents to overcome social dilemmas that might arise in the process of collaborative R&D. For empirical validation, a unique data set is used (23 German innovation networks, containing about 600 agents). Results of the analyses highlight the dynamics and interdependence of knowledge generation and trust as well as the sources of trust building in terms of three different components (generalised trust, specific trust, and institutional trust). The multi-agent system comprises the theoretical and empirical findings, e.g. in incorporating heterogeneity with regard to adaptive capacity, reciprocity and the tolerance of non-reciprocal behaviour. The results give evidence of the (changing) relevance of trust in the course of collaborative R&D. The success of collaborative R&D is determined through a co-evolution of individual and interactive processes of knowledge transformation und trust building.
    Keywords: Regional Innovation System, Innovation Networks, Behavioral Economics, Trust, Knowledge Transfer.
    Date: 2007–05
  6. By: Bonein Aurélie; Serra Daniel
    Abstract: This paper highlights a new social motivation, the indirect reciprocity, through a three-player dictator-ultimatum game. Player 2 has the opportunity to reward or punish indirectly the player 1 by inciting – with her offer - player 3 to accept or to reject the division. We implement three treatments: in the first two we vary player 2’s available information whereas in treatment 3, players take part in a dictator game - as proposers - before being player 2s in the dictatorultimatum game. Results show that 55% of subjects in treatment 2 and 28% in treatment 3 behave as indirect reciprocity predicts. Another reciprocal behavior - the generalized reciprocity - is investigated through a three-player dictator game. Our data show that 80% of players 2 act according to this reciprocal behavior. Finally, our findings confirm that the more complex the strategic interaction becomes the more self-regarding behavior is likely and the less otherregarding behaviors, such as reciprocity, dominate.
    Date: 2007–04
  7. By: Bin Gu (McCombs School of Business, University of Texas at Austin); Yun Huang (McCormick School of Engineering and Applied Science, Northwestern University); Wenjing Duan (George Washington University); Andrew B. Whinston (McCombs School of Business, University of Texas at Austin)
    Abstract: Online peer-to-peer communities and online social networks have become increasingly popular. In particular, the recent boost of online peer-to-peer communities leads to exponential growth in sharing of user-contributed content which have brought profound changes to business and economic practices. Understanding the formation and sustainability of such peer-to-peer communities has important implications for businesses. We develop a dynamic two-sided network model that relates growth of communities to interactions between contribution and consumption of resources in online sharing activities. Using online music sharing data collected from a popular IRC music sharing service over five years, we empirically apply the model to identify dynamics in the music sharing community. We find that the music sharing community demonstrates distinctive characteristics of a two-sided network. Contribution in the community leads to more consumption and consumption leads to more contribution, creating positive network effects in the community. Moreover, we find significant negative externalities among consumption activities and among contribution activities. The combination of the positive and negative externalities drives the underlying dynamics and growth of online sharing communities. Using the dynamic model, we quantify equilibrium growth rate of the community. We find that the equilibrium growth rate changes over time, possibly as a result of legal actions taken by the music industry. Our study provides a first glimpse into the mechanism through which peer-to-peer communities sustain and thrive in a constantly changing environment.
    Keywords: online communities, two-sided networks, IRC channel, peer-to-peer network, evolutionary games, digital piracy
    JEL: L14 C73 O34
    Date: 2007–10
  8. By: Romina Boarini; Christine Le Clainche
    Abstract: In this paper we examine the support given by French households to public intervention for reducing inequalities and improving well-being of the low-income classes. We first discuss to what extent the model of self interest could be relied upon when one wants to take into account social norms to explain the individual demand for redistribution. We find that social beliefs matter for explaining the individual attitudes towards public intervention. We find also that the support given to redistribution can increase or decrease depending on the interaction between reciprocity norms and beliefs about causes of poverty.
    Date: 2007–03
  9. By: Jaromir Kovarik
    Abstract: We analyze first-order beliefs in a variation of the Public Good Game. We show that (1) the role that belief elicitation plays in the experiment affects both the contribution behavior and beliefs, and (2) framing influences stated beliefs, as much as contribution behavior. In the second part of the paper, we study the role of heterogeneity in the formation of initial beliefs, and provide an empirical model of the belief up-dating process. Subjects use the past experience, stressing the role of experience that comes from situations similar to the current ones.
    Keywords: Beliefs, Public Good, Framing, Experiment, (Belief) Learning
    JEL: C91 D83 D84 H40
    Date: 2007–09
  10. By: Jens Großer; Arthur Schram
    Abstract: We experimentally study the impact of public opinion poll releases on voter turnout and welfare in a participation game. We find higher turnout rates when polls inform the electorate about the levels of support for various candidates than when polls are prohibited. Distinguishing between allied and floating voters, our data show that this increase in turnout is entirely due to floating voters. Very high turnout is observed when polls indicate equal support levels for the candidates. This has negative consequences for welfare. Though in aggregate social welfare is hardly affected, majorities benefit more often from polls than minorities. Finally, our comparative static results are better predicted by quantal response (logit) equilibrium than by Bayesian Nash equilibrium.
    Keywords: laboratory experiments.
    JEL: C92
    Date: 2007–09
  11. By: Matteo Ploner (Max Planck Institute of Economics, Strategic Interaction Group); Anthony Ziegelmeyer (Max Planck Institute of Economics, Strategic Interaction Group)
    Abstract: This note reports a replication study of Falk and Kosfeld’s (2006) medium control treatment. In the experimental game, an agent has an endowment of 120 experimental currency units and decides how much to transfer to a principal. For every unit that the agent gives up, the principal receives two units. Before the agent decides how much to transfer voluntarily, the principal decides whether or not to control the agent by imposing a compulsory transfer of 10 units. Like the original study, we observe that control entails hidden costs. Unlike the original study, we do not observe that the hidden costs of control outweigh the beneï¬ts and we observe that most of the principals decide to control the agent.
    Keywords: Control, Experimental Economics, Incentives, Intrinsic Motivation, Trust.
    JEL: C91 M52
    Date: 2007–10–30
  12. By: Gould, Eric D; Kaplan, Todd
    Abstract: This paper examines the issue of whether workers learn productive skills from their co-workers, even if those skills are unethical. Specifically, we estimate whether Jose Canseco, one of the best baseball players in last few decades, affected the performance of his teammates. In his autobiography, Canseco claims that he improved the productivity of his teammates by introducing them to steroids. Using panel data on baseball players, we show that a player's performance increases significantly after they played with Jose Canseco. After checking 30 comparable players from the same era, we find that no other baseball player produced a similar effect. Clearly, Jose Canseco had an unusual influence on the productivity of his peers. These results are consistent with Canseco's controversial claims, and suggest that workers not only learn productive skills from their co-workers, but sometimes those skills may derive from unethical practices. These findings may be relevant to many workplaces where competitive pressures create incentives to adopt unethical means to boost productivity and profits.
    Keywords: corruption; crime; peer effects
    JEL: J24
    Date: 2007–11
  13. By: David B. Audretsch (Max Planck Institute of Economics, Jena); Werner Boente (Max Planck Institute of Economics, Jena); Jagannadha Pawan Tamvada (Max Planck Institute of Economics, Jena)
    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 behavior.
    Keywords: entrepreneurship, religion, caste-system, India
    JEL: L26 Z12
    Date: 2007–10–30
  14. By: Giorgio Coricelli (CNRS); Mateus Joffily (CNRS); Claude Montmarquette (CIRANO, University of Montréal); Marie-Claire Villeval (CNRS-GATE, University of Lyon and IZA)
    Abstract: The economic models of tax compliance predict that individuals should evade taxes when the expected benefit of cheating is greater than its expected cost. When this condition is fulfilled, the high compliance however observed remains a puzzle. In this paper, we investigate the role of emotions as a possible explanation of tax compliance. Our laboratory experiment shows that emotional arousal, measured by Skin Conductance Responses, increases in the proportion of evaded taxes. The perspective of punishment after an audit, especially when the pictures of the evaders are publicly displayed, also raises emotions. We show that an audit policy that induces shame on the evaders favors compliance.
    Keywords: tax evasion, emotions, neuro-economics, physiological measures, shame, experiments
    JEL: C91 C92 D87 H26
    Date: 2007–10
  15. By: Elchanan Ben-Porath
    Abstract: The paper analyzes an economy with asymmetric information in which agents trade in contingent assets. The new feature in the model is that each agent may have any prior belief on the states of nature and thus the posterior belief of an agent maybe any probability distribution that is consistent with his private information. We study two solution concepts: Equilibrium, which assumes rationality and market clearing, and common knowledge equilibrium (CKE) which makes the stronger assumption that rationality, market clearing, and the parameters which de?ne the economy are common knowledge. The two main results characterize the set of equilibrium prices and the set of CKE prices in terms of parameters which specify for each state s and event E the amount of money in the hands of agents who know the event E at the state s. The characterizations that are obtained apply to a broad class of preferences which include all preferences that can be represented by the expectation of a state dependent monotone utility function. One implication of these results is a characterization of the information that is revealed in a CKE.
    Date: 2007–06

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.