nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒03‒15
fourteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Social Capital, Innovation and Growth: Evidence from Europe By Akçomak, I. Semih; ter Weel, Bas
  2. Ethnic Networks and Employment Outcomes By Patacchini, Eleonora; Zenou, Yves
  3. Trust, Honesty and Regulations By Pinotti, Paolo
  4. Civic Participation of Immigrants: Culture Transmission and Assimilation By Aleksynska, Mariya
  5. Trust in International Organizations: An Empirical Investigation Focusing on the United Nations By Benno Torgler
  6. Social Learning and Peer Effects in Consumption: Evidence from Movie Sales By Enrico Moretti
  7. Who Leaves the City? The Influence of Ethnic Segregation and Family Ties By Zorlu, Aslan
  8. Segregation, Entrepreneurship and Work Values: The Case of France By Senik, Claudia; Verdier, Thierry
  9. Social Preferences and Strategic Uncertainty: An Experiment on Markets and Contracts By Antonio Cabrales; Raffaele Miniaci; Marco Piovesan; Giovanni Ponti
  10. Stable Economic Cooperation: A Relational Approach By Gilles, R.P.; Lazarova, E.A.; Ruys, P.H.M.
  11. The Three Spheres of Society – Markets, Governments, and Communities – Related to Fiske’s Four Relational Modes:Modeled in dynamic balance explaining why social goods are more important than social capital By Wicks, Rick
  12. Performance Spillovers and Social Network in the Workplace: Evidence from Rural and Urban Weavers in a Chinese Textile Firm By Kato, Takao; Shu, Pian
  13. Regional and technological effects of cooperation behavior By Uwe Cantner; Andreas Meder
  14. The emergence of norms of cooperation in stag hunt games with production By L. Bagnoli; G. Negroni

  1. By: Akçomak, I. Semih (Maastricht University); ter Weel, Bas (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper investigates the interplay between social capital, innovation and per capita income growth in the European Union. We model and identify innovation as an important mechanism that transforms social capital into higher income levels. In an empirical investigation of 102 European regions in the period 1990-2002, we show that higher innovation performance is conducive to per capita income growth and that social capital affects this growth indirectly by fostering innovation. Our estimates suggest that there is no direct role for social capital to foster per capita income growth in our sample of European Union countries.
    Keywords: social capital, innovation, economic growth, European Union
    JEL: O1 O3 O52 Z13
    Date: 2008–02
  2. By: Patacchini, Eleonora (University of Rome La Sapienza); Zenou, Yves (Stockholm University)
    Abstract: We analyse the effect of strong and weak ties on the individual probability of finding a job. Using the dynamic model of Calvó-Armengol and Jackson (2004), two results are put forward: (i) the individual probability of finding a job is increasing in the number of strong and weak ties; (ii) the longer the length of ties, the lower is this effect. We approximate the social space by the geographical space. Ethnicity is the chosen dimension along which agents’ social contacts develop and, as a result, we use ethnic population density to capture social interactions within the given ethnic group. Using a panel of local authority-level data in England between 1993 and 2003, we find that (i) the higher the percentage of a given ethnic group living nearby, the higher the employment rate of this ethnic group; (ii) this effect decays very rapidly with distance, losing significance beyond approximately 90 minutes travel time.
    Keywords: ethnic minorities, social interactions, population density, weak and strong ties
    JEL: A14 C33 J15 R23
    Date: 2008–02
  3. By: Pinotti, Paolo
    Abstract: This paper investigates the importance of cultural traits for understanding the causes and consequences of government intervention in the economy. First, it presents a simple model in which, under reasonable assumptions about the structure of the economy and the individual values and beliefs, more trustful individuals prefer lower product market regulation. This theoretical prediction is supported by evidence from international survey data. Second, it shows that, if trust predicts trustworthiness across countries, lower honesty would drive both greater regulation and higher incidence of illegal activities. It follows that some of the negative effects usually associated with government intervention may indeed be a consequence of underlying cultural traits. In particular, evidence from cross-country data suggests that a large part of the effect of regulation on corruption and unofficial activity estimated in previous studies can be attributed to omitted variation in trust and honesty.
    Keywords: trust; honesty; regulations; corruption; unofficial economy
    JEL: L51 D02 Z10 K42
    Date: 2008–03
  4. By: Aleksynska, Mariya
    Abstract: This paper employs the European Social Survey and the World Values Survey to empirically investigate civic participation of immigrants from fifty-four countries of origin to the European Union. Three sets of issues are addressed in this paper. First, the paper aims at understanding what factors determine civic participation of immigrants at large. Second, it seeks to shed light on differences and similarities between participation outcomes of immigrants and natives. The main part of the paper is dedicated to testing culture transmission and culture assimilation hypothesis with respect to civic participation. Culture assimilation is analysed within the traditional synthetic cohort methodology, and also by testing whether the levels of immigrants’ civic participation depend on the levels of natives’ civic participation in the same countries. Culture transmission is looked at by relating the levels of participation of nonmigrants in countries of origin to participation outcomes of those who migrate. In addition, the effect of other country of origin and country of destination characteristics on immigrants’ civic participation is investigated. The issue of immigrants’ self-selection is addressed by matching immigrants to otherwise similar natives and compatriots who did not migrate. The study finds limited evidence for the transmission of participation culture across borders, although certain home country characteristics continue influencing participation behaviour of individuals after migration: it is those from industrialized, net immigration, culturally more homogeneous countries who tend to participate more. On the other hand, the culture of current place of residence matters most in that by observing higher (lower) participation patterns among natives immigrants tend to participate more (less).
    Keywords: immigration; civic participation; social assimilation; culture transmission
    JEL: F22 Z10 O15 J61 Z13
    Date: 2007–04
  5. By: Benno Torgler
    Abstract: The literature on social capital has strongly increased in the last two decades, but there still is a lack of substantial empirical evidence about the determinants of international trust. This empirical study analyses a cross-section of individuals, using micro-data from the World Values Survey, covering 38 countries, to investigate trust in international organizations, specifically in the United Nations. In line with previous studies on international trust we find that political trust matters. We also find that social trust is relevant, but contrary to previous studies the results are less robust. Moreover, the paper goes beyond previous studies investigating also the impact of geographic identification, corruption and globalization. We find that a higher level of (perceived) corruption reduces the trust in the UN in developed countries, but increases trust in developing and transition countries. A stronger identification with the world as a whole also leads to a higher trust in the UN and a stronger capacity to act globally in economic and political environment increases trust in the UN.
    Keywords: International Organizations, United Nations, International Trust, Political Trust, Social Trust, Corruption, Globalization
    JEL: Z13 D73 O19
    Date: 2007–12
  6. By: Enrico Moretti
    Abstract: Using box-office data for all movies released between 1982 and 2000, I test the implications of a simple model of social learning in which the consumption decisions of individuals depend on information they receive from their peers. The model predicts different box office sales dynamics depending on whether opening weekend demand is higher or lower than expected. I use a unique feature of the movie industry to identify ex-ante demand expectations: the number of screens dedicated to a movie in its opening weekend reflects the sales expectations held by profit-maximizing theater owners. Several pieces of evidence are consistent with social learning. First, sales of movies with positive surprise and negative surprise in opening weekend demand diverge over time. If a movie has better than expected appeal and therefore experiences larger than expected sales in week 1, consumers in week 2 update upward their expectations of quality, further increasing week 2 sales. Second, this divergence is small for movies for which consumers have strong priors and large for movies for which consumers have weak priors. Third, the effect of a surprise is stronger for audiences with large social networks. Finally, consumers do not respond to surprises in first week sales that are orthogonal to movie quality, like weather shocks. Overall, social learning appears to be an important determinant of sales in the movie industry, accounting for 38% of sales for the typical movie with positive surprise. This implies the existence of a large "social multiplier'' such that the elasticity of aggregate demand to movie quality is larger than the elasticity of individual demand to movie quality.
    JEL: J0 L15
    Date: 2008–03
  7. By: Zorlu, Aslan (University of Amsterdam)
    Abstract: In the last three decades, the population of Amsterdam has been ‘coloured’ due to immigration flows from abroad and a low outflow rate among these immigrants and their descendants. The question is to what extent differences in spatial mobility behaviour of migrants and natives are generated by neighbourhood characteristics – among which the level of ethnic segregation – and family ties? This article examines spatial mobility process of Amsterdam population using administrative individual data covering the entire population of the city. The analysis shows that Caribbean (Surinamese and Antillean) migrants have a higher probability of moving to suburbs while Moroccans and Turks tend to rearrange themselves within the city. The estimates reveal that neighbourhood ‘quality’ has only a modest impact on the probability of moving while family ties significantly hamper the out-mobility of all individuals. The impact of family ties is the largest for Turkish and Moroccan migrants.
    Keywords: migrants, residential mobility, family ties
    JEL: J1
    Date: 2008–02
  8. By: Senik, Claudia (University of Paris IV Sorbonne, PSE); Verdier, Thierry (PSE)
    Abstract: This paper studies the interaction between labor market integration, the evolution of “work values” and entrepreneurial capital inside minority communities. A simple model of labor market segmentation with ethnic capital and endogenous transmission of cultural values inside the minority group is presented. It emphasizes the role of entrepreneurial capital as an important driver of labor market integration and as a promoter of meritocratic work values inside the community. The case of South European and North African second generation immigrants in France is then empirically studied as an example, contrasting strongly how the differential economic and cultural integration in the labor market correlates with the differential level of entrepreneurial capital of the two communities.
    Keywords: social capital, ethnic segmentation, work values, labor discrimination
    JEL: J15 J61 J7 Z13
    Date: 2008–01
  9. By: Antonio Cabrales (Universidad Carlos III de Madrid); Raffaele Miniaci (Università di Brescia); Marco Piovesan (Department of Economics, University of Copenhagen); Giovanni Ponti (Universidad de Alicante)
    Abstract: This paper reports experimental evidence on a stylized labor market. The experiment is designed as a sequence of three phases. In the first two phases, P1 and P2; agents face simple games, which we use to estimate subjects' social and reciprocity concerns, together with their beliefs. In the last phase, P3; four principals, who face four teams of two agents, compete by offering agents a contract from a fixed menu. Then, each agent selects one of the available contracts (i.e. he "chooses to work" for a principal). Production is determined by the outcome of a simple effort game induced by the chosen contract. We find that (heterogeneous) social preferences are significant determinants of choices in all phases of the experiment. Since the available contracts display a trade-off between fairness and strategic uncertainty, we observe that the latter is a much stronger determinant of choices, for both principals and agents. Finally, we also see that social preferences explain, to a large extent, matching between principals and agents, since agents display a marked propensity to work for principals with similar social preferences.
    Keywords: social preferences; team incentives; mechanism design; experimental economics
    JEL: C90 D86
    Date: 2008–03
  10. By: Gilles, R.P.; Lazarova, E.A.; Ruys, P.H.M. (Tilburg University, Center for Economic Research)
    Abstract: We consider a relational economy in which economic agents participate in three types of relational economic activities: autarkic activities; binary matching activities; and plural cooperative activities. We introduce a stability notion and characterize stable interaction structures, both in the absence of externalities from cooperation as well as in the presence of size-based externalities. It is shown that institutional elements such as the emergence of socio-economic roles and organizations based on hierarchical leadership structures support and promote stable economic development.
    Keywords: Cooperatives;Networks;Clubs;Relational economies;Stable matchings
    JEL: C72 D71 D85
    Date: 2008
  11. By: Wicks, Rick (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Social scientists, journalists, and others typically refer to three social “spheres”: markets, governments, and communities – whether based on kinship, location, or belief. This taxonomy is here related to Fiske’s (1991) relational modes (RMs): Community-Sharing, Authority-Ranking, Equality-Matching, and Market-Pricing, which display fundamental cumulative mathematical characteristics, and develop spontaneously in children (regardless of the emphasis in the surrounding culture); in the same order; and at about the same ages. CS identifies communities, while EM adds an alternative mode of community resource-transfer (fairness, equality). Governments and markets apparently differentiated from the primordial community sphere to express other modes: AR in governments, and MP in markets. Each sphere is assumed to have an essential core, beyond which it can expand if and as other spheres shrink. In the long run, the size of each sphere may reflect changing social, psychological, and physical (including information) technologies; changing cultural preferences for the private, public, and social goods (and social capital) produced in the three spheres; and some resulting meta-economic efficiency. In the short to medium run, however, the outcome depends on human will and choice in evaluating uncertain information about technologies, preferences, and efficiency. The outcome can thus be influenced by ideology, including through the application of inappropriate RMs. Communities produce social goods, including a sense of identity, meaning, and purpose; feelings of kindness, companionship, and love; and much more. Although social goods can be private, they are inherently non-marketable, so they are distinct from typical private goods. Similarly, although social goods can be public, most cannot be produced by governments, so they are distinct from typical public goods. Analogously to physical capital, social capital – also produced by communities – can be understood as a factor of production of either private or public goods. Valuing social capital instrumentally (an MP value), as recent economic theory has done, can thus be destructive of the source of social capital, communities. Economic theory – and economists – could contribute to the maintenance and development of this third sphere of communities and social goods by simply acknowledging its distinct RMs and its omission from their usual analyses.<p>
    Keywords: meta-economic efficiency; social taxonomy
    JEL: A12 A13 B52 D20 H10 O30 P00 Z10
    Date: 2008–03–10
  12. By: Kato, Takao (Colgate University); Shu, Pian (MIT)
    Abstract: We provide some of the first rigorous evidence on performance spillovers and social network in the workplace. The data we use are rather extraordinary – weekly data for rejection rates (proportion of defective output) for all weavers in a firm during a 12 months (April 2003-March 2004) period, more than 10,000 observations. Our fixed effect estimates first point to significant spillovers of performance from high-ability weavers to low-ability weavers. On the other hand, we find no evidence for performance spillovers from low-ability to high-ability weavers. The findings are consistent with the knowledge sharing hypothesis that low-ability workers learn from high-ability workers but not vice versa. Second, by exploiting the well-documented fact that an exogenously-formed sharp divide between urban workers and rural migrant workers exists in firms in Chinese cities, we find that performance spillovers/knowledge sharing take place only within the confines of social network. Specifically rural low-ability weavers are found to improve their performance as their high-ability teammates (who are also rural migrants) improve their performance while they do not benefit from performance improvement of their high-ability teammates who are urban residents. Such heterogeneous performance interdependence of workers within the same team suggests that our evidence for performance spillovers is less likely to be a result of team specific demand shocks that generate spurious performance interdependence of all team members.
    Keywords: knowledge sharing, performance spillovers, social network
    JEL: M5 J24 L2
    Date: 2008–02
  13. By: Uwe Cantner (Friedrich-Schiller-University Jena, Department of Economics); Andreas Meder (Friedrich-Schiller-University Jena, Department of Economics)
    Abstract: In this paper we investigate the determinants of cooperative innovation and put our main focus on the regional or spatial and on the technological or sectoral dimension. We suggest a method to disentangle these two factors and to extract differential regional effects. The latter can be used to identify and evaluate the strength of regional innovation systems. Applying this method to German patent data we find evidence that regional differences in the degree of cooperative innovation are not only due to the technological/sectoral composition of the region but also due to a specific regional effect.
    Keywords: Cooperative innovation, regional innovation system, technological proximity, spatial proximity
    JEL: O31 P25 Q55
    Date: 2008–02–25
  14. By: L. Bagnoli; G. Negroni
    Date: 2008–02

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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