nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒01‒26
nine papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Does Social Capital Create Trust? Empirical Analysis of a Community of Entrepreneurs By Sabatini, Fabio
  2. Social Network Capital, Economic Mobility and Poverty Traps By Chantarat, Sommarat; Barrett , Christopher
  3. The Effect of Hours of Work on Social Interaction By Henry Saffer; Karine Lamiraud
  4. Institutions matter: the case of Vietnam By Thi Bich Tran, Tom Kompas and R. Quentin Grafton
  5. Is observed other-regarding behavior always genuine? By Astrid Matthey; Tobias Regner
  6. The evolution of costly displays, cooperation, and religion. Inferentially potent displays and their implications for cultural evolution By J. Heinrich
  7. The Drama of Fishing Commons: Cournot-Nash Model and Cooperation By José António Filipe
  8. Mixing Family With Business: A Study of Thai Business Groups and the Families Behind Them By Marianne Bertrand; Simon Johnson; Krislert Samphantharak; Antoinette Schoar

  1. By: Sabatini, Fabio
    Abstract: This paper carries out an empirical investigation into the causal relationships connecting four types of social capital (i.e. bonding, bridging, linking, and corporate), and three forms of trust (horizontal, meso, and vertical), in a community of entrepreneurs located in the Italian industrial district of Tuscia. The contribution of the paper to the literature is threefold: for the fitst time, the very multidimensionality of the concepts of social capital and trust is fully acknowledged within an empirical investigation, providing useful insights on what type of networks may benefit the economic activity. Second, we provide an assessment of the role of strong family ties, that are generally referred to as a form of bonding social capital causing backwardness. Third, we enrich the traditional tripartition of the forms of social capital by introducing the new category of corporate ties. Fourth, we propose structural equations models as a suitable technique for the study of multidimensional phenomena like trust and social capital. Il capitale sociale è comunemente definito come l’insieme delle reti di relazioni interpersonali e delle norme sociali che favoriscono l’azione collettiva per il perseguimento di fini condivisi. Tuttavia, l’individuazione di quali reti e quali norme abbiano un effetto positivo è oggetto di un acceso dibattito nella comunità scientifica. È invece comunemente accettata la convinzione che le reti siano in grado di migliorare la performance dell’economia solo nei limiti in cui contribuiscono alla creazione e diffusione della fiducia. In questo saggio ricostruiamo le relazioni esistenti tra le diverse forme di capitale sociale e la fiducia attraverso una indagine empirica su una comunità di piccoli imprenditori situati nel distretto della Tuscia. Obiettivo del paper è rispondere alla domanda: quale tipo di capitale sociale ha un effetto positivo sulla fiducia?
    Keywords: Capitale sociale; Norme sociali; Fiducia; Italia; Distretti industriali; Social capital; Social norms; Trust; Italy; Industrial districts
    JEL: Z13
    Date: 2008–01–17
  2. By: Chantarat, Sommarat; Barrett , Christopher
    Abstract: The paper explores the role social network capital might play in facilitating poor agents’ escape from poverty traps. We model and simulate endogenous network formation among households heterogeneously endowed with both traditional and social network capital who make investment and technology choices over time in the absence of financial markets and faced with multiple production technologies featuring different fixed costs and returns. We show that social network capital can serve as either a complement to or a substitute for productive assets in facilitating some poor households’ escape from poverty. However, the voluntary nature of costly social network formation also creates both involuntary and voluntary exclusionary mechanisms that impede some poor households’ exit from poverty. Through numerical simulation, we show that the ameliorative potential of social networks therefore depends fundamentally on broader socioeconomic conditions, including the underlying wealth distribution in the economy, that determine the feasibility of social interactions and the net intertemporal benefits of social network formation. In some settings, targeted public transfers to the poor can crowd-in private resources by inducing new social links that the poor can exploit to escape from poverty.
    JEL: O1 Z1 I3
    Date: 2008–01
  3. By: Henry Saffer; Karine Lamiraud
    Abstract: Over time, increases in hours of work per capita have created the intuitively plausible notion that there is less time available to pursue social interactions. The specific question addressed in this paper is the effect of hours of work on social interaction. This is a difficult empirical question since omitted factors could increase both hours of work and social interaction. The approach taken in this paper utilizes an exogenous decline in hours of work in France due to a new employment law. The results clearly show that the employment law reduced hours of work but there is no evidence that the extra hours went to increased social interactions. Although hours of work are not an important determinant of social interaction, human capital is found to be important. The effect of human capital, as measured by education and age, is positive for membership groups but negative for visiting relatives and friends. Also, contrary to expectations, there are no important differences in the determinants of social interaction by gender, marital status or parent status. Finally, a comparison between France and the US show that the response to human capital and other variables are much the same in both nations.
    JEL: Z1
    Date: 2008–01
  4. By: Thi Bich Tran, Tom Kompas and R. Quentin Grafton
    Abstract: The paper investigates institutional reforms in Vietnam and their impact on the economic performance of firms. Using the provincial competitiveness index 2006 (PCI06) and firm-level data in Vietnam in 2005, the results show that provincial competitiveness is economically and statistically significant in explaining cross-province differences in firm performance. We find that a one percentage point improvement in government practice could increase the daily value-added of an average firm by an amount equivalent to nearly three times per capita GDP per day. The results show that an improvement in providing market information, more secure land tenure and labor training assistance has a positive effect on firm performance. By contrast, weaknesses in the judiciary system and administrative reforms impede growth of non-state firms. The findings indicate that governance is an important obstacle to the development of the non-state sector in Vietnam.
    Date: 2008
  5. By: Astrid Matthey (Max Planck Institute of Economics, Jena, Germany); Tobias Regner (Friedrich Schiller University, Jena, Germany)
    Abstract: We investigate to what extent genuine social preferences can explain observed other-regarding behavior. In a social dilemma situation (a dictator game variant), people can choose whether to learn about the consequences of their choice for the receiver. We ï¬nd that a majority of the people that show other-regarding behavior when the payoffs of the receiver are known chose to ignore them if possible. This behavior is inconsistent with genuine other-regarding preferences. Our model explains other-regarding behavior as avoiding cognitive dissonance: People do not behave fairly because they genuinely care for others, but because they like to think of themselves as being fair. The model can explain our data as well as earlier experimental data.
    Keywords: social preferences, experiments, social dilemma, cognitive dissonance
    JEL: C9 C7 D8
    Date: 2007–12–21
  6. By: J. Heinrich
    Abstract: This paper lays out an evolutionary theory for the cognitive foundations and cultural emergence of the extravagant displays (e.g., ritual mutilation, animal sacrifice, and martyrdom) that have so often tantalized social scientists, as well as more mundane actions that influence cultural learning and historical processes. In Part I, I use the logic of natural selection to build a theory for how and why seemingly costly displays influence the cognitive processes associated with cultural learning—why do “actions speak louder than words.†The core idea is that cultural learners can avoid being manipulated by their potential models (those they are inclined to learn from) if they are biased toward models whose actions/displays would seem costly to the model if he held beliefs different from those he expresses verbally. I call these actions inferentially potent displays. Predictions are tested with experimental work from psychology. In Part II, I examine the implications for cultural evolution of this evolved bias in human cultural learning. The formal analytical model shows that this learning bias creates evolutionarily stable sets of interlocking beliefs and individually-costly practices. Part III explores how cultural evolution, driven by competition among groups or institutions stabilized at alternative sets of these interlocking belief-practice combinations, has led to the association of costly acts, often in the form of rituals, with deeper commitments to group beneficial ideologies, higher levels of cooperation within groups, and greater success in competition with other groups or institutions. Predictions are explored with existing cross-cultural, ethnographic, ethnohistorical and sociological data. I close by briefly sketching some further implications of these ideas for the study of religion and ritual.
    Keywords: Length 51 pages
    Date: 2007–12
  7. By: José António Filipe
    Keywords: Cournot-Nash model; drama of the commons; cooperation; game theory; fishing effort.
    Date: 2007
  8. By: Marianne Bertrand; Simon Johnson; Krislert Samphantharak; Antoinette Schoar
    Abstract: Families run a large fraction of business groups around the world. In this paper, we analyze how the structure of the families behind these business groups affects the groups' organization, governance and performance. To address this question, we constructed a unique data set of family trees and business groups for nearly 100 of the largest business families in Thailand. We find a strong positive association between family size and family involvement in the ownership and control of the family business. The sons of the founders play a central role in both ownership and board membership, especially when the founder of the group is gone. The availability of more sons is also associated with lower firm-level performance, especially when the founder is no longer present. We identify a possible governance channel for this performance effect. Excess control by sons, but not other family members, is associated with lower firm performance. In addition, excess control by sons increases with the number of sons and with the death of the founder. One hypothesis that emerges from our analysis is that part of the decay of family-run groups over time may be due to a dilution of ownership and control across a set of equally powerful descendants of the founder, which creates a race to the bottom in tunneling resources out of the group firms.
    JEL: D13 G30 J12 Z19
    Date: 2008–01
  9. By: Miguel A. Meléndez-Jiménez (Universidad de Alicante)
    Abstract: This paper presents a model in which players interact via the formation of costly links and the benefits of bilateral interactions are determined by a coordination game. A novel contribution of this paper is that the fraction of the cost borne by each player involved in a bilateral link is not fixed exogenously, but results from bargaining. We analyze the model both in a static and a dynamic setting. Whereas the static game has multiplicity of equilibria, we show that only one is stochastically stable.
    Keywords: Coordination; Nash bargaining solution; Risk-dominance; Stochastic stability
    JEL: C72 C73 C78
    Date: 2007–12

This nep-soc issue is ©2008 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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