nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒04‒15
thirteen papers chosen by
Fabio Sabatini
University of Rome, La Sapienza

  1. Crime and Social Sanction By Paolo Buonanno; Daniel Montolio; Paolo Vanin
  2. Relational goods, sociability, and happiness. By Becchetti Leonardo; Pelloni Alessandra; Rossetti Fiammetta
  3. The Evolution of Social Norms and Individual Preferences By Rodrigo Harrison; Mauricio Villena
  4. The economics of networks - A survey of the empirical literature By Daniel Birke
  5. Social Deprivation and Exclusion of Immigrants in Germany By John P. Haisken-DeNew; John P. Haisken-DeNew and Mathias Sinning
  6. The Effect of Intragroup Communication on Preference Shifts in Groups By Brady, Michael P.; Wu, Steven Y.
  7. Distributive fairness in an intercultural ultimatum game By Sebastian Goerg; Werner Güth; Gari Walkowitz; Torsten Weiland
  8. Incentive Design and Trust: Comparing the Effects of Tournament and Team-Based Incentives on Trust By Oxoby, Robert J.; Friedrich, Colette
  9. Urban Inequality and Political Recruitment Networks By Strömblad, Per; Myrberg, Gunnar
  10. Social Interaction, Observational Learning, and Privacy: the "Do Not Call" Registry By Khim Yong, Goh; Kai-Lung, Hui; I.P.L. , Png
  11. Wage Effects of Recruitment Methods: The Case of the Italian Social Service Sector By Mosca, Michele; Pastore, Francesco
  12. Performance Pay, Sorting and Social Motivation By Eriksson, Tor; Villeval, Marie-Claire
  13. Crescita Economica o Sviluppo Civile? Altre Vie per il Mezzogiorno. By Radhuber, Michael

  1. By: Paolo Buonanno (University of Bergamo); Daniel Montolio (University of Utrecht); Paolo Vanin (University of Padova)
    Abstract: Social sanctions may be a strong deterrent of crime. This paper presents a formal model that relates crime and social sanction to social interaction density. We empirically test the theoretical predictions using a provincial level panel dataset on dierent crimes in Italy between 1996 and 2003. We exploit detailed demographic and geo-morphological information to develop exogenous measures of social interaction density. We estimate a spatial panel model by means of a GMM procedure and we nd that provinces with denser social interactions display significantly and substantially lower rates of property crime, but not of violent crime.
    Keywords: Crime, Spatial Panel, Social Interaction, Social Sanction
    JEL: A14 K42 Z13
    Date: 2008–03
  2. By: Becchetti Leonardo; Pelloni Alessandra; Rossetti Fiammetta
    Abstract: The role of sociability and relational goods has generally been neglected in the formulation of standard economics textbook preferences. Our findings show that relational goods have significant and positive effects on self declared life satisfaction, net of the impact of other concurring factors. We also document that such effects persist when the equally significant inverse causality nexus is taken into account. This implies that a more intense relational life enhances life satisfaction and, at the same time, happier people have a more lively social life. Finally, we show that gender, age and education matter by showing that the effects of sociability on happiness are stronger for women, older and less educated individuals.
    JEL: H41 Z13
    Date: 2008–04
  3. By: Rodrigo Harrison (Instituto de Economía. Pontificia Universidad Católica de Chile.); Mauricio Villena
    Abstract: Why does an altruistically inclined player behave altruistically in some contexts and egoistically or spitefully in others? This article provides an economic explanation to this question. The basic argument is centered on the idea that social norms shape our preferences through a process of cultural learning. In particular, we claim that, in contexts with a stable norm of reciprocity, an altruistic player can respond in kind to egoistic or spiteful players by behaving either egoistically or spitefully when confronting them and yet continue to be an altruistic player. This is why, instead of studying the evolution of preferences as such, in this work we analyze the evolution of social norms that indirectly determine individual preferences and behavior. Such a study requires that we distinguish between players' behavioral preferences, or those individuals show with their behavior, and players' intrinsic preferences, or those they inherently support or favor. We argue that, whereas the former can change through the evolution of social norms, in this case a reciprocity norm, the latter are not subject to evolutionary pressures and, therefore, we assume them to be given.
    Keywords: Social Norms, Reciprocity, Endogenous
    JEL: C72 A13
    Date: 2008
  4. By: Daniel Birke
    Abstract: Network effects, the increase in value of consuming a product if many other consumers use the same product, is a feature of many markets of high-technology products. Frequently cited examples of products exhibiting network effects are telecommunication or software products. This paper surveys the burgeoning empirical literature that has developed especially during the last years. After theoretical work dominated the earlier years of research in this area, newer research has combined theoretical models with empirical studies and applied work with direct implications for marketing and public policy. Furthermore, insights from the study of social networks have been applied to analyse how consumers interact with each other. The paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate.
    Keywords: network effects, social networks, structural models
    Date: 2008–04–04
  5. By: John P. Haisken-DeNew; John P. Haisken-DeNew and Mathias Sinning
    Abstract: This paper aims at providing empirical evidence on social exclusion of immigrants in Germany. We demonstrate that when using a conventional definition of the social inclusion index typically applied in the literature, immigrants appear to experience a significant degree of social deprivation and exclusion, confirming much of the economic literature examining the economic assimilation of immigrants in Germany. We propose a weighting scheme that weights components of social inclusion by their subjective contribution to an overall measure of life satisfaction. Using this weighting scheme to calculate an index of social inclusion, we find that immigrants are in fact as "included" as Germans. This result is driven strongly by the disproportionately positive socio- demographic characteristics that immigrants possess as measured by the contribution to their life satisfaction.
    Keywords: Social exclusion, international migration, integration
    JEL: F22 I31 Z13
    Date: 2007–11
  6. By: Brady, Michael P. (U.S. Department of Agriculture); Wu, Steven Y. (Ohio State University)
    Abstract: We use a laboratory gift-exchange game to examine decisions made by groups under three different procedures that dictate how group members interact and reach decisions in comparison to individuals acting alone. We find that group decisions do deviate from those of individuals, but the direction and magnitude of gift exchange depend critically on the procedure. This suggests that no general statements can be made concerning the propensity of groups to exhibit reciprocal or other-regarding behavior relative to individuals. The rules governing how group members can express their preferences and expectations to other group members are critical for determining group outcomes.
    Keywords: group behavior, teams, decision making, social preferences
    JEL: C91 C92
    Date: 2008–04
  7. By: Sebastian Goerg (BonnEconLab, University of Bonn); Werner Güth (Max Planck Institute of Economics); Gari Walkowitz; Torsten Weiland (Max Planck Institute of Economics)
    Abstract: Does geographic or (perceived) social distance between subjects signi?cantly affect proposer and responder behavior in ultimatum bargaining? To answer this question, subjects once play an ultimatum game with three players (proposer, responder, and dummy player) and asymmetric information (only the proposer knows what can be distributed). Treatments differ in their geographical scope in that they involve either one or three subject pools which, in the latter case, structurally differ in their between-subject pool heterogeneity. Observed choice behavior corroborates several stylized facts of this class of ultimatum games which are primarily explained by strategic play and other-regarding preferences. While the extent of self-interested allocation behavior in proposers signi?cantly varies across sites, neither proposers nor responders meaningfully condition their choices on their co-players' provenance or affiliation. Altogether, we do not discern articulate discriminative behavior based on geographic or social distance.
    Keywords: Equity, fairness, social preferences, ultimatum bargaining, redistribution, cross-national experiment
    JEL: C70 C91 D63
    Date: 2008–03–27
  8. By: Oxoby, Robert J. (University of Calgary); Friedrich, Colette (MIT)
    Abstract: We explore the extent to which the structure of incentives affects trust. We hypothesize that the degree to which different incentive mechanisms emphasize competition (via the perceived intentions of others) and entitlements (via the perceived property rights) will affect individuals’ subsequent behavior. In our experiment, bargaining pairs earned endowments through either tournaments or team-based incentives. Participants engaged in a subsequent trust game in which the sender had access to the total endowment generated by the pair. We find that the structure of the incentive mechanisms has asymmetric effects on observed trust in which participants’ relative performance framed trusting behavior.
    Keywords: trust, incentives, experiments, tournaments
    JEL: J31 J33 C92 D63
    Date: 2008–03
  9. By: Strömblad, Per (Institute for Futures Studies); Myrberg, Gunnar (Uppsala University)
    Abstract: This paper provides evidence of segregation-generated differences in political recruitment networks. By taking explicit account of social-geographical differentiation in the urban landscape, we evaluate—in prior work largely neglected—contextual effects on requests for participation. Consistent with previous research, we find that those activists who try to convince others to participate in political life systematically use a set of selection criteria when deciding whom to approach. However, using recent data based on a sample of inhabitants of Swedish cities and properties of their neighborhoods, we also show that the degree of (aggregate-level) social exclusion negatively influences (individual-level) recruitment efforts. This contextual effect stems both from the disproportional population composition as such in residential areas, and from recruiters’ rational avoidance of areas marked by high levels of social exclusion. We conclude that these logics jointly reinforce urban inequalities regarding the chances for ordinary citizens to be invited to political life.
    Keywords: political recruitment; political recruiters; contextual effects; Civic Voluntarism Model; statistical discrimination
    JEL: I39 J19
    Date: 2008–02
  10. By: Khim Yong, Goh; Kai-Lung, Hui; I.P.L. , Png
    Abstract: Many empirical studies have inferred contagion in behavior from a correlation between individual behavior and the behavior of others in the same social group, rather than from any direct evidence. The correlation has been variously attributed to social interaction, word of mouth communication, and observational learning. As Manski (1993) famously observed, such correlation might be explained by peer group influence, but also, similar responses to common environmental changes. More generally, correlation in behavior raises two questions – how information is transmitted and why individuals follow the choices of others. We address these questions in the context of subscriptions to the U.S. "do not call" registry in June-August 2003. Using a rich set of data culled from multiple sources, including longitudinal observations of household choice, we are able to separately identify -- Methods by which information is transmitted – social interaction and news media; -- Reasons why households follow the choices of others – observational learning and telemarketing diversion, and the impact of household heterogeneity on such learning and diversion. Among methods of information transmission, social interaction was relatively more important than news media. Among reasons for contagion, telemarketing diversion was relatively more important than observational learning, while the extent of learning decreased with social heterogeneity.
    JEL: I30 D18 L51 M31 J18
    Date: 2008–04
  11. By: Mosca, Michele (University of Naples, Federico II); Pastore, Francesco (University of Naples II)
    Abstract: This paper uses a unique data set containing detailed micro-information on organisations, managers, workers and volunteers belonging to public, private forprofit and private nonprofit institutions delivering social services in Italy. The analysis aims to estimate the determinants of wages across organisations at a sector level focusing on the role of hiring and job search methods, including informal networks. We find that, independent of the organisation type, being hired through public competitions brings with it a substantial wage premium (ranging from 7 to 32%). Informal networks bring with them a wage penalty (-6.5%) in the state sector, where formal hiring methods are common, and a wage premium (6.3%) in social cooperatives and religious institutions, where formal hiring methods are not common. Interestingly, the differences in hiring and in job search methods between state and private organisations explain from 50% to 100% of the conditional wage differentials across organisation types. Our interpretation of these findings is that nonprofit organisations prefer informal recruitment methods not for nepotistic reasons, but to better select the most motivated workers, those who share the nonprofit mission. This paper adds to the previous literature by suggesting that in addition to lower than average monetary compensations, informal recruitment methods are part of the process of self-selection of motivated workers in nonprofit organisations.
    Keywords: informal networks, social services, earnings functions, nonprofit organisations, Italy
    JEL: I11 J31 J41 L31 L33 L84
    Date: 2008–03
  12. By: Eriksson, Tor (Department of Economics, Aarhus School of Business); Villeval, Marie-Claire (Department of Economics, Aarhus School of Business)
    Abstract: Variable pay creates a link between pay and performance but may also help firms in attracting more productive employees. Our experiment investigates the impact of performance pay on both incentives and sorting and analyzes the influence of repeated interactions between firms and employees on these effects. We show that (i) the opportunity to switch from a fixed wage to variable pay scheme increases the average effort level and its variance; (ii) high skill employees concentrate under the variable pay scheme; (iii) however, in repeated interactions, efficiency wages reduce the attraction of performance pay. Social motivation and reputation influence both the provision of incentives and their sorting effect.
    Keywords: Performance pay; incentives; sorting; social motivation; experiment
    JEL: C91 J31 J33 M52
    Date: 2008–04–04
  13. By: Radhuber, Michael
    Abstract: For over 60 years conspicuous sums of money have been diverted to southern Italian regions. Nonetheless the positive effect of the so called extraordinary intervention has been limited. The south continues to be characterized by stagnant economies with high unemployment rates and rather low levels of income. Associated therewith are high rates of organized crime, poor public services and many social problems that make life difficult in the Mezzogiorno of Italy. So why did more than 60 years of special policies not lead to the desired outcome? This book is about analysing the economic situation of the Mezzogiorno of Italy on the basis of a comparative descriptive approach, which is later on extended to a sectoral analysis of the southern economy based on an input-output model elaborated by IRPET. This allows for analysis of exogenous growth options (trade) as well as endogenous ones. Special attention is furthermore drawn to the the logistics, that appears to offer significant potential for an economic revival of the southern regions. The characteristic of this book is that it focuses not only on economic issues, but proceeds to check for a link between the economic situation and social issues. Policies have so far been directed mainly to the economic environment. Recent literature has however increasingly focused on social matters that impede higher rates of economic growth. Not only human capital or crime matter, but especially political and institutional characteristics, that can be considered simple mirrors for the grade of civil development of the southern societies. Bureaucracy and the legal system figure amongst the principal culprits for the problematic situation of the Mezzogiorno. In the end civil issues can be considered at least as important for economic prosperity in southern Italy as strictly economic factors.
    Keywords: Mezzogiorno, sviluppo, civile, crescita, economica, input-output, logistica, istituzioni, sistema, legale, capitale, sociale;
    JEL: O1 R0 O2
    Date: 2007–11

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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