nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒02‒02
thirteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Social Networks and Trust: not the Experimental Evidence you may Expect By Daniela Di Cagno; Emanuela Sciubba
  2. Social Interactions and Labor Market Outcomes in Cities By Zenou, Yves
  3. Happiness and time allocation By Baucells, Manel; Sarin, Rakesh K.
  4. Network Games By Andrea Galeotti; Sanjeev Goyal; Matthew O. Jackson; Fernando Vega-Redondo; Leeat Yariv
  5. measures of social capital and trust By o'higgins, s. niall; Sbriglia, Patrizia
  6. Networks Emerging in a Volatile World By George Ehrhardt; Matteo Marsili; Fernando Vega-Redondo
  7. Beilef in Network Games (Revised version of CentER DP 2007-46) By Kets, W.
  8. Spiraling Down into Corruption: A Dynamic Analysis of the Social Identity Processes that Cause Corruption in Organizations to Grow By Nieuwenboer, N.A. den; Kaptein, M.
  9. In Bargaining We Trust By Saran Rene
  10. Cooperation under Interval Uncertainty By Alparslan-Gok, S.Z.; Miquel, S.; Tijs, S.H.
  11. What networks do to firms and what firms do to networks: Evolution of alliance portfolios in networked markets By Ozcan, Pinar
  12. What Do Economists Know About Crime? By Angela K. Dills; Jeffrey A. Miron; Garrett Summers
  13. Why NGOs matter for the success of sports events? The case of the America's Cup By Jacopin, Tanguy; Urrutia, Ignacio

  1. By: Daniela Di Cagno; Emanuela Sciubba (School of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: We run a laboratory experiment were friendship networks are generated endogenously within an anonymous group. Our experiment builds on two phases in sequence: a network formation game and a trust game. We ?find that in those sessions where the trust game is played before the network formation game, the overall level of trust is not signi?cantly different from the one observed in a simple trust game; in those sessions where the trust game is played after the network formation game we ?find that the overall level of trust is signi?cantly lower than in the simple trust game. Hence surprisingly trust does not increase because of enforced reciprocity and moreover a common social history does affect the level of trust, but in a negative manner. Where network effects matter is in the choice of whom to trust: while we tend to trust less on average those with whom we have already interacted compared to total strangers, past history allows us to select whom to trust relatively more than others.
    Keywords: network formation, trust game, experiments
    JEL: C91 C92 L14
    Date: 2008–01
  2. By: Zenou, Yves (Stockholm University)
    Abstract: We develop a model where information about jobs is essentially obtained through friends and relatives, i.e. strong and weak ties. Workers commute to a business center to work and to interact with other people. We find that housing prices increase with the level of social interactions in the city because information about jobs is transmitted more rapidly and, as a result, individuals are more likely to be employed and to be able to pay higher land rents. We also show that, under some condition, workers using more their weak ties than strong ties to find a job receive a higher wage. We finally demonstrate that workers living far away from jobs pay lower housing prices but experience higher unemployment rates than those living close to jobs because they mainly rely on their strong ties to obtain information about jobs.
    Keywords: social networks, labor market, weak ties, land rent
    JEL: D85 J60 R14
    Date: 2008–01
  3. By: Baucells, Manel (IESE Business School); Sarin, Rakesh K. (UCLA Anderson School of Management)
    Abstract: We consider a resource allocation problem in which time is the principal resource. Utility is derived from time-consuming leisure activities, as well as from consumption. To acquire consumption, time needs to be allocated to income generating activities (i.e., work). Leisure (e.g., social relationships, family and rest) is considered a basic good, and its utility is evaluated using the Discounted Utility Model. Consumption is adaptive and its utility is evaluated using a reference-dependent model. Key empirical findings in the happiness literature can be explained by our time allocation model. Further, we examine the impact of projection bias on time allocation between work and leisure. Projection bias causes individuals to overrate the utility derived from income; consequently, individuals may allocate more than the optimal time to work. This misallocation may produce a scenario in which a higher wage rate results in a lower total utility.
    Keywords: Life satisfaction; Work; Leisure; Social comparison; Adaptation;
    Date: 2007–09–09
  4. By: Andrea Galeotti; Sanjeev Goyal; Matthew O. Jackson; Fernando Vega-Redondo; Leeat Yariv
    Abstract: In a variety of contexts - ranging from public goods provision to information collection - a player's well-being depends on own action as well as on the actions taken by his or her neighbors. We provide a framework to analyze such strategic interactions when neighborhood structure, modeled in terms of an underlying network of connections, a¤ects payo¤s. We provide results characterizing how the network structure, an individual.s position within the network, the nature of games (strategic substitutes versus complements and positive versus negative externalities), and the level of information, shape individual behavior and payoffs.
    Keywords: Networks, Network Games, Graphical Games, Diffusion, Incomplete Information
    JEL: D85 C72 L14 Z13
    Date: 2008
  5. By: o'higgins, s. niall; Sbriglia, Patrizia
    Abstract: Trust and trustworthiness are important components of social capital and much attention has been devoted to the problems of their correct evaluation. Attitudinal survey questions as reported in the EVS – European Value Survey - are often regarded as inefficient indicators of trust, since they lack of behavioural underpinnings (Putnam, 1995) which one might desire when measuring trust. In this paper, we consider alternative measures of trust and trustworthiness, based on behavioural assumptions. We construct two relative behavioural measures of trust (RBM1 and RBM2), both based on the ex post measurement of trust, once individuals are informed on the level of trustworthiness of the social group to which they have been allocated during the experiment. Our main finding is that the relative behavioural measures show that trust strongly varies once the individual is informed on the on the level of trustworthiness of the social group to which he\she has been allocated during the experiment. This difference is higher the higher is the family level of income and the parental education status. As for previous findings (Glaeser et al., 2000, Lazzarini, 2005) which have found no correlation between attitudinal and behavioural measures of trust, we find that relative behavioural measures are not correlated to attitudinal measures but they are strongly correlated to groups’ trustworthiness. We also find that similar social preferences profiles (between Senders and Recipients) tend to enhance the individual level of trust, in the RBM2 context. This result seems to confirm the importance of the homogeneity of the social environment when studying the effects of policy interventions (Alesina and La Ferrara, 2002).
    Keywords: social capital; trust; experiments
    JEL: A10
    Date: 2007–08
  6. By: George Ehrhardt; Matteo Marsili; Fernando Vega-Redondo
    Abstract: The paper proposes a model to study the conditions under which complex networks emerge (or not) when agents are involved in a dynamic coordination setup. The focus, however, is not on the classical issue of equilibrium selection - instead, our aim is to shed light on how agents' efforts to coordinate a¤ect the process of network formation in a large and complex environment. The model posits that, over time, new links are created if they are pro.table, and existing links disappear due to exogenous decay. Alongside this struggle between link creation and link destruction, agents' choices in the coordination game adapt to their current local conditions and thus coevolve with the social network. The dynamic behavior of the system is studied within di¤erent time scales (the long and ultralong runs), which di¤er in the role accorded to the noise that is induced by finite populations. We characterize analytically the evolution of the modelin each case and show that, depending on the time scale under consideration, the process displays discontinuous transitions in overall connectivity, resilient transformations in network topology, and equilibrium multiplicity. This behavior is akin to that observed concerning various network phenomena where coordination and network formation display mutually reinforcing roles.
    JEL: C73 D83 D85
    Date: 2008
  7. By: Kets, W. (Tilburg University, Center for Economic Research)
    Abstract: Networks can have an important effect on economic outcomes. Given the complexity of many of these networks, agents will generally not know their structure. We study the sensitivity of game-theoretic predictions to the specification of players? (common) prior on the network in a setting where players play a fixed game with their neighbors and only have local information on the network structure. We show that two priors are close in a strategic sense if and only if (i) the priors assign similar probabilities to all events that involve a player and his neighbors, and (ii) with high probability, a player believes, given his type, that his neighbors? conditional beliefs are close under the two priors, and that his neighbors believe, given their type, that. . . the conditional beliefs of their neighbors are close, for any number of iterations.
    Keywords: Network games;incomplete information;higher order beliefs;continuity;random networks;population uncertainty.
    JEL: C72 D82 L14 Z13
    Date: 2008
  8. By: Nieuwenboer, N.A. den; Kaptein, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: To date, theory and research on corruption in organizations have primarily focused on its static antecedents. This paper focuses on the spread and growth of corruption in organizations. For this purpose three downward organizational spirals are formulated: the spiral of divergent norms, the spiral of pressure, and the spiral of opportunity. Social Identity Theory is used to explain the mechanisms of each of these spirals. Our dynamic perspective contributes to a greater understanding of the development of corruption in organizations and opens up promising avenues for future research.
    Keywords: corruption;dynamics;organizational factors;social identity theory
    Date: 2007–12–07
  9. By: Saran Rene (METEOR)
    Abstract: We introduce trustworthy traders in bilateral trading. Trustworthy traders do not misrepresent their private information. We prove that an increase in the levels of trust (probabilities that traders are trustworthy) can reduce the maximum attainable probability of trade among the strategic traders in the set of k-double auctions. In contrast, if the levels of trust increase, then we can construct direct mechanisms with a higher probability of trade among the strategic traders. In fact, there exist ex-post efficient direct mechanisms if the levels of trust are high but k-double auctions are inefficient for all levels of trust. We prove that k-double auctions are constraint-inefficient for generic levels of trust when players have uniform priors.
    Keywords: microeconomics ;
    Date: 2007
  10. By: Alparslan-Gok, S.Z.; Miquel, S.; Tijs, S.H. (Tilburg University, Center for Economic Research)
    Abstract: Classification: JEL code C71
    Keywords: Cooperative game theory;Interval uncertainty;Core;Value;Balancedness
    Date: 2008
  11. By: Ozcan, Pinar (IESE Business School)
    Abstract: This study explores the question of how alliance portfolios change over time. In the setting of the U.S. wireless gaming market, I collected real-time and longitudinal data on entrepreneurial game publishers over two and a half years. This process revealed that alliance portfolios of firms can grow or deteriorate rapidly through virtuous or vicious cycles, depending on their starting position in a networked market. Those firms in a virtuous cycle have the additional advantage that they can use resource-dependence strategies to fuel the virtuous cycle. Finally, I find that changes in a firm's alliance portfolio occur simultaneously with other firm-level changes, such as physical growth, new rounds of financing, public offering and game coverage. The findings have potential contributions to literature at the firm, portfolio, and network levels. Overall, the picture provided is one that advocates multi-level and longitudinal analysis for the understanding of firm, portfolio, and network-level outcomes deriving from firm-level interactions and portfolio strategies.
    Keywords: Alliance portfolios; firm evolution; strategy; resource dependence;
    Date: 2007–09–11
  12. By: Angela K. Dills; Jeffrey A. Miron; Garrett Summers
    Abstract: In this paper we evaluate what economists have learned over the past 40 years about the determinants of crime. We base our evaluation on two kinds of evidence: an examination of aggregate data over long time periods and across countries, and a critical review of the literature. We argue that economists know little about the empirically relevant determinants of crime. Even hypotheses that find some support in U.S. data for recent decades are inconsistent with data over longer horizons or across countries. This conclusion applies both to policy variables like arrest rates or capital punishment and to less conventional factors such as abortion or gun laws. The hypothesis that drug prohibition generates violence, however, is generally consistent with the long times-series and cross-country facts. This analysis is also consistent with a broader perspective in which government policies that affect the nature and amount of dispute resolution play an important role in determining violence.
    JEL: K0
    Date: 2008–01
  13. By: Jacopin, Tanguy (IESE Business School); Urrutia, Ignacio (IESE Business School)
    Abstract: Collaborations among companies and NGOs have been widely described in the literature. However, little has been said about how NGOs can become a key success factor for sports events. Palliating the uncertainties associated with consumer response, in this paper it is argued that NGO activist behavior is now a stronger antecedent of success in sporting events than consumer response. The America's Cup is used to illustrate how collaboration with NGOs can create value for all stakeholders and produce the desired outcome.
    Keywords: Stakeholder Management; Value Creation; Sport Marketing; Sport events;
    Date: 2007–09–03

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.
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.