nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒03‒25
twelve papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Dangerous liaisons: a social network model for the gender wage gap By Maarten Goos; Anna Salomons
  2. Productivity effects of innovation, stress and social relations By Weehuizen, Rifka; Sanditov, Bulat; Cowan, Robin
  3. Rosca Participation in Benin: a Commitment Issue By Olivier Dagnelie; Philippe LeMay-Boucher
  4. Do monetary rewards undermine intrinsic motivations of volunteers? Some empirical evidence for Italian volunteers By Fiorillo, Damiano
  5. Measuring and accounting for community capabilities in Kordofan, Sudan: By Harizi, Khalid El; Klemick, Heather
  6. Social status in a social structure: noisy signaling in networks By Tom Truyts
  7. Effects of social interactions on scientists' productivity By Carillo, Maria Rosaria; Papagni, Erasmo; Capitanio, Fabian
  8. Innovation in Business Groups By Sharon Belenzon; Tomer Berkovitz
  9. Leadership and Group Size: An Experiment By Mana Komai; Philip J. Grossman
  10. Innovación en el cultivo del maní en Bolivia: Efectos de la interacción social y de las capacidades de absorción de los pequeños productores By Hartwich, Frank; Arispe, Tito; Monge, Mario
  11. Aspirations, Adaptation and Subjective Well-Being of Rural-Urban Migrants in China By John Knight; Ramani Gunatilaka
  12. Comments on Neuroeconomics By Ariel Rubinstein

  1. By: Maarten Goos; Anna Salomons
    Abstract: We combine stylized facts from social network literature with findings from the literature on the gender wage gap in a formal model. This model is based on employers’ use of social networks in the hiring process in order to assess employee productivity. As a result, there is a persistent gender wage gap, with women being underpaid relative to men after controlling for productivity characteristics. Networks exhibit inbreeding biases by productivity and by gender, which in combination with women’s lower network density cause women to be hired less often through referral, as well as receive a lower average referral wage premium. Finally, we use 2001-2006 UK Labour Force Survey data to test the hypotheses implied by our model. We find that networks do indeed account for a significant part of the gender wage gap for newly hired workers.
    Keywords: social networks, gender wage gap, imperfect information
    JEL: J16 J31
    Date: 2008–03
  2. By: Weehuizen, Rifka (UNU-MERIT, Maastricht University); Sanditov, Bulat (UNU-MERIT, Maastricht University); Cowan, Robin (UNU-MERIT, Maastricht University)
    Abstract: Innovation is a source of increasing productivity, but it is also a source of stress. Psychological research shows that moderate stress increases the productivity of an actor, but above a certain level, additional stress decreases productivity. Stress is reduced by coping behaviour of the actor, and in addition it is buffered by social relations. However, high levels of stress negatively affect social relations, causing social erosion. In a formal model including inter-agent dynamics, we show that the variables moderating stress levels are of crucial importance for identifying the overall effects of different rates of innovation on productivity. The model shows among other things that the existence and nature of relationships of people determine the extent to which a certain rate of innovation effectively results in increasing productivity. In addition, it shows the possibility of multiple equilibria - under some parameter values both high- and low-stress steady states exist; and the dynamics exhibit hysteresis. At very high levels of stress, innovation can result in a dissolution of social relations, and has a negative relationship with the rate of economic growth.
    Keywords: innovation, work-related stress, social relationships
    JEL: O4 J28 C61
    Date: 2008
  3. By: Olivier Dagnelie; Philippe LeMay-Boucher
    Abstract: In the light of first-hand data from a Beninese urban household survey in Cotonou, we investigate several motives aiming to explain participation in Rotating Savings and Credit ASsociations. We provide anecdotal pieces of evidence, descriptive statistics, FIML regressions and matching estimates which tend to indicate that most individuals use their participation in a rosca as a device to commit themselves to save money and to deal with self-control problems.
    Keywords: ROSCA, self-control, commitment device, Benin
    JEL: G2 O16 O17
    Date: 2008–02–10
  4. By: Fiorillo, Damiano
    Abstract: Empirical studies show that intrinsic motivations increase the volunteer labour supply. This paper studies how monetary rewards to volunteers affect their intrinsic motivations. Using a sample of Italian volunteers, allowing to distinguish the type of volunteer, the paper shows that monetary rewards (extrinsic motivations) influence positively the choice to donate voluntary hours, while a low intrinsic motivation seems to decrease hours per week. Moreover, monetary rewards increase the hours per week of individuals with low intrinsic motivation. Thus, a crowding in effect on low intrinsic motivation might emerge for continuative volunteers.
    Keywords: Monetary rewards; intrinsic motivations; volunteer labour supply
    JEL: Z13
    Date: 2007
  5. By: Harizi, Khalid El; Klemick, Heather
    Abstract: "Parallel to the growing attention being devoted to the relationship between empowerment and development, an increasing number of tools are being developed to measure empowerment and determine the link between these two phenomena. This paper details the methodological processes used to construct, test and possibly refine one such instrument, the Community Capability Index, an innovative tool to measure community capabilities in the domain of natural resource governance. Empirical reference is made to research conducted in 85 villages in North and South Kordofan, Sudan. Following this, the paper presents findings from analyses of the determinants of community capabilities, including geographic, economic, and institutional variables. The results suggest that in Kordofan a number of factors influence capabilities. Possessing a village market, proximity to the nearest town, and access to credit are economic variables that have a significant and highly positive effect on community capabilities. Regarding the environment, capabilities are found to be greater where there is more rainfall, but access to groundwater from lower-quality aquifers and cracking clay soils have negative impacts on capabilities. War shocks, as might be expected, have a negative and significant effect. Particularly interesting is the generally weak correlation found between capabilities and wealth, along with strong correlations between institutional and social dimensions of community capabilities and participation in donor-funded projects. This combination suggests that development interventions must take into account the non-identity of poverty reduction and empowerment processes, at least when the targeted agents are communities rather than individuals or households. The findings reveal areas for further investigation into the relationship between the determinants and dimensions of capabilities, and the potential significance of the relationship for some dimensions suggests context-specific interventions to strengthen the relevant capabilities." from Authors' Abstract
    Keywords: Capabilities, Community Capabilities Index, Empowerment, methodologies, Social capital,
    Date: 2007
  6. By: Tom Truyts
    Abstract: How do incentives to engage in costly signaling depend on social structure? This paper formalises and extends Thorstein Veblen’s theory of how costly signaling by conspicuous consumption depends on social structure. A noisy signaling game is introduced in which spectators observe signals only imperfectly, and use Bayesian updating to interpret the observed signals. It is shown that this noisy signaling game has (under some weak regularity conditions) a unique plausible Perfect Bayesian Nash equilibrium. Then, a social information network is introduced as a second source of information about a player’s type. Equilibrium signaling depends in the resulting game on the relative quality of the substitute sources of information, which depends again on the social network. For some highly stylised networks, the dependence of equilibrium costly signaling on network characteristics (network size, density and connectedness, the centrality of the consumer in the network) is studied, and a simple dominance result for more arbitrary networks is suggested.
    Date: 2008–03
  7. By: Carillo, Maria Rosaria; Papagni, Erasmo; Capitanio, Fabian
    Abstract: Recent economic research has focused on the economic effects of the social environment. In the economic literature, important phenomena are considered, at least in part, as results of the individual's social environment. There is a similar revival of interest among economists who analyse the world of science and basic research. In this case as well, the environment plays a key role in the agent's behaviour. This paper makes an an empirical analysis of the influence of social interactions on scientists' productivity. In the econometric analysis we investigate the aggregate importance of this phenomenon through the analysis of data on publications in four scientific fields of seven advanced countries. We find that social interactions among researchers have positive effects on a scientist's productivity and that there is a U-shaped relation between the size of a scientific network and individual productivity. We interpret this result as providing evidence for threshold externalities and increasing returns to scale.
    Keywords: Keywords: scientists' productivity; increasing returns in science; social interactions.
    JEL: O41 H41 Z13
    Date: 2007–11
  8. By: Sharon Belenzon; Tomer Berkovitz
    Abstract: Using novel data on European firms, this paper examines the effect of business group affiliation on innovation. We find that business groups foster the scale and novelty of corporate innovation. Group affiliation is particularly important in industries that rely more on external finance and have a higher degree of information asymmetry. We also find that the innovation of affiliates is less sensitive to operating cash flows. We interpret our results as supporting the `bright side` of business group internal capital markets and explain how legal boundaries between group affiliates mitigate the inefficiencies found in internal capital markets of US conglomerates.
    Keywords: Business Groups, Innovation, Internal Capital Markets
    JEL: G34 L22 L26 O32
    Date: 2007
  9. By: Mana Komai; Philip J. Grossman (Department of Economics, St. Cloud State University)
    Abstract: Recent theoretical and experimental work suggests that leading by example can induce full cooperation in collective actions. Our experimental study suggests that leading by example loses its effectiveness in large groups. Our interpretation is that the discrepancy between the leaders’ incentives and those of an individual follower increases with group size. On one hand, leaders become more pivotal in larger groups and thus eager to participate. On the other hand, followers become more marginal in larger groups and thus more eager to free ride. Under these circumstances, leading by example becomes too weak to overcome the strong free riding problem.
    Keywords: Leading by example, Free-riding, Cooperation, Group size
    Date: 2008–03
  10. By: Hartwich, Frank; Arispe, Tito; Monge, Mario
    Abstract: "This report presents the results of a study on local innovation in four peanut-producing regions in Bolivia. It aimed at identifying the type of organizations and mechanisms contributing the most to the adoption of innovations. The theoretical framework utilized suggests that farmers introduce and apply innovations as a combined result of their perceptions on the utility derived from doing so, and their individual and collective capabilities to absorb those innovations... [The] results guide to the conclusion that to achieve a larger and better participation of small peanut farmers in innovation processes, it is necessary to (1) adapt innovation sets to farmers absorptive capabilities; (2) try to improve the individual absorptive capabilities through financing schemes, training and sensibilization efforts; (3) promote and substantially intensify interactions among innovation providers and farmers, in a way that collective absorptive capabilities and a common learning on technology's applications and applicability can be developed; and (4) include other actors from the transportation, processing and exportation sectors in partnership arrangements, in order to improve their common understanding of production, quality and market opportunities, as well as to open and widen access to markets and to complementary financial support." from Executive summary in English
    Keywords: Peanuts, Social networks, Small farmers, Absorptive capabilities, Agricultural innovations, Technological innovations,
    Date: 2007
  11. By: John Knight; Ramani Gunatilaka
    Abstract: This research is among the first to link the literatures on migration and on subjective well-being in developing countries. It poses the question: why do rural-urban migrant households settled in urban China have an average happiness score lower than that of rural households? It examines the hypothesis that migrants have false expectations because they cannot foresee how their aspirations will adapt to their new situation, and draws on research on both psychology and sociology. Estimated happiness functions and decomposition analyses, based on a 2002 national household survey, suggest that their high aspirations in relation to achievement, influenced by their new reference groups, make for unhappiness. The evidence is consistent with the hypothesis.
    Keywords: Rural-Urban Migration, Subjective Well-Being, Happiness, Relative Deprivation, Aspirations, China
    JEL: I32 O15
    Date: 2008
  12. By: Ariel Rubinstein
    Date: 2008–03–17

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