nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒06‒27
twelve papers chosen by
Fabio Sabatini
University of Siena

  1. The Role of religion in economic and demographic behavior in the US: a review of recent literature. By Evelyn L. Lehrer
  2. Network Structure and Strategic Investments: An Experimental Analysis By Rosenkranz, Stephanie; Weitzel, Utz
  3. Taboos: Considering the Unthinkable By Fershtman, Chaim; Gneezy, Uri; Hoffman, Moshe
  4. Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons By Markus Schaffner; Benno Torgler
  5. Financially Constrained Fluctuations in an Evolving Network Economy By Domenico Delli Gatti; Mauro Gallegati; Bruce C. Greenwald; Alberto Russo; Joseph E. Stiglitz
  6. Intangible Capital and Productivity: An Exploration on a Panel of Italian Manufacturing Firms By Maria Elena Bontempi; Jacques Mairesse
  7. The Effect of Aspirations, Habits, and Social Security on the Distribution of Wealth. By Jordi Caballé; Ana I. Moro Egido
  8. Do Employees Care About Their Relative Position? Behavioural Evidence Focusing on Performance. By Benno Torgler; Markus Schaffner; Sascha L. Schmidt; Bruno S.Frey
  9. Positive and Negative Team Identity in a Promotion Game By Marion Eberlein; Gari Walkowitz
  10. Justifiability of Littering: An Empirical Investigation By Benno Torgler; Maria A. Garcia-Valinas; Alison Macintyre
  11. Coming Closer? Tax Morale, Deterrence and Social Learning after German Unification By Lars P. Feld; Benno Torgler; Bin Ding
  12. Voracity and Growth Reconsidered By Strulik, Holger

  1. By: Evelyn L. Lehrer (University of Illinois at Chicago - Economics Department)
    Abstract: The past few years have witnessed substantial progress in our understanding of how religious factors influence economic and demographic factors including education, female employment, fertility, and union formation and dissolution. In this paper I highlight results from recent studies on the role of religion in these and related economic and demographic behaviors, updating the critical literature review presented in an earlier article (Lehrer 2004a). Based on the theoretical framework suggested there, I also offer a reinterpretation of previous findings in the literature and identify promising avenues for future research. The focus of this review is on the United States, but a few closely related studies that employ data from other countries are also included.
    Keywords: religion; fertility; education.
    JEL: J24 J15 J22
    Date: 2008–06–09
  2. By: Rosenkranz, Stephanie; Weitzel, Utz
    Abstract: This paper analyzes the effects of network positions and individual risk attitudes on individuals' strategic decisions in an experiment where actions are strategic substitutes. The game theoretic basis for our experiment is the model of Bramoullé and Kranton (2007). In particular, we are interested in disentangling the influence of global, local and individual factors. We study subjects' strategic investment decisions in four basic network structures. As predicted, we find that global factors, such as the regularity of the network structure, influence behavior. However, we also find evidence that individual play in networks is to some extent boundedly rational, in the sense that coordination is influenced by local and individual factors, such as the number of (direct) neighbors, local clustering and individuals' risk attitudes.
    Keywords: coordination; experiment; risk aversion; Social networks; strategic substitutes
    JEL: C72 C91 D00 D81 D85 H41
    Date: 2008–06
  3. By: Fershtman, Chaim; Gneezy, Uri; Hoffman, Moshe
    Abstract: A taboo is an "unthinkable" action, that is, even the thought of violating it triggers social punishment. Taboos are the social "thought police," discouraging individuals from considering certain type of actions. We consider a simple model in which taboos are part of the definition of one's identity. Deliberating over breaking the taboo adds the action to the individual’s choice set and provides information on possible private benefits but is costly because it contradicts one's identity. The strength of the taboo is endogenously determined by the number of individuals that obey it without any consideration of its violation. We model stable taboos and examine how they can change and disappear over time as a result of changes in the distribution of private benefits gained from its violation. We assume that individuals are heterogeneous with respect to their attitudes towards social punishment. We then analyze the relationship between social heterogeneity and the strength as well as effectiveness of taboos, i.e., are taboos stronger in homogenous or heterogeneous societies? We extend our analysis and examine societies in which individuals may choose among several identities, characterized by different taboos or varying strengths of taboos. Having such a choice defines an evolutionary process with respect to identity: Some identities disappear while others flourish. We examine the characterization and the conditions giving rise to a multi-identity society.
    Keywords: Identity; Social Norms; Taboos
    JEL: D63 H41 Z13
    Date: 2008–06
  4. By: Markus Schaffner; Benno Torgler
    Abstract: It is generally understood that people care about their absolute income position, and several studies have in fact moved beyond this, showing that people also place considerable significance on their relative income position. However, empirical evidence about the behavioural consequences is scarce. We address this shortcoming by exploring the relative income effect in a (controlled) sporting contest environment. Specifically, we look at the pay-performance relationship by working with a large panel data set consisting of 26 NBA seasons. We explore how closeness affects positional concerns exploring in detail several potential reference groups. This allows checking of their relevance and of the scope of comparisons, a critical aspect in the literature that requires further investigation.
    Date: 2008–06–17
  5. By: Domenico Delli Gatti; Mauro Gallegati; Bruce C. Greenwald; Alberto Russo; Joseph E. Stiglitz
    Abstract: We explore the properties of a credit network characterized by inside credit - i.e. credit relationships connecting downstream (D) and upstream (U) firms - and outside credit - i.e. credit relationships connecting firms and banks. The structure of the network changes over time due to the preferred-partner choice rule: each agent chooses the partner who charges the lowest price. The net worth of D firms turns out to be the driver of fluctuations. U production, in fact, is determined by demand of intermediate inputs on the part of D firms and production of the latter is financially constrained, i.e. determined by the availability of internal finance proxied by net worth. The output of simulations shows that at the macroeconomic level a business cycle can develop as a consequence of the complex interaction of the agents' financial conditions. We can also reproduce the main stylized facts of firms' demography, i.e. the power law distribution of firms' size and the Laplace distribution of firms' growth rates.
    JEL: E3
    Date: 2008–06
  6. By: Maria Elena Bontempi; Jacques Mairesse
    Abstract: The paper examines the size and productivity of total intangible capital relative to total tangible capital for a large panel of Italian Manufacturing firms. In the analysis, we decompose total intangibles in two different ways: in intangibles expensed in firms' current accounts (as usually considered in empirical studies) versus intangible capitalized in firms' balance sheets (usually not considered); and in "intellectual capital" (i.e. R&D expenditures, and patenting and related costs) versus "customer capital" (i.e., advertising expenditure, and trademarks and related costs). We systematically assess the robustness of our results by using different specifications of the production functions implying different elasticities of substitution between tangible and intangible capital, and comparing different panel data estimates. Our results underscore that firms' accounting information on intangible investments is genuinely informative, showing that intangible capital and its different components are at least as productive as tangible capital.
    JEL: C23 C52 D24
    Date: 2008–06
  7. By: Jordi Caballé (Unitat de Fonaments de l’Anàlisi Economica and CODE, Universitat Autònoma de Barcelona.); Ana I. Moro Egido (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: In this paper, we analyze how the introduction of habits and aspirations affects the distribution of wealth when individuals’ labor productivity is subject to idiosyncratic shocks and bequests arise from a joy-of-giving motive. In the presence of either bequests or aspirations, labor income shocks are transmitted intergenerationally and this transmission, together with the contemporaneous income shocks, determines the stationary distribution of wealth. We show that the introduction of aspirations increases both the intragenerational variability of wealth and the corresponding degree of intergenerational mobility. The opposite result holds when habits are introduced. Finally, we discuss how aspirations and habits interact with the redistributive features of an unfunded social security system.
    Keywords: Aspirations, Habits, Wealth Distribution, Social Security.
    JEL: D31 E21 E62
    Date: 2008–06–09
  8. By: Benno Torgler; Markus Schaffner; Sascha L. Schmidt; Bruno S.Frey
    Abstract: Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times.
    Keywords: Relative income, positional concerns, envy, social comparison, relative derivation, performance
    JEL: D00 D60 L83
    Date: 2008–06–16
  9. By: Marion Eberlein; Gari Walkowitz
    Abstract: Abstract: In this paper we experimentally investigate whether the so-called in-group/out-group bias leads to a favoring of own team members as candidates in promotion (by voting for them) relative to other teams and their members. In contrast to psychological approaches, mon- etary incentives for voting choices are implemented and objective performance criteria defined and thus the extent of the in-group/out-group bias is exactly measured. Our data show that face-to-face interaction with team members leads more subjects to favor own team-mates than in anonymous interaction. Moreover, not only the frequency but also the average extent of positive team identity is higher with face-to-face interaction according to objective performance measures. A further finding suggests that only anonymous team interaction often leads to substantial discrimination of own team members (i.e., negative team identity), which also is an interesting new finding and extends previous indings of psychologists on the in-group/out-group bias.
    Keywords: Team identity, promotion, experiments
    JEL: M5 L2 C9
    Date: 2008–06
  10. By: Benno Torgler; Maria A. Garcia-Valinas; Alison Macintyre
    Abstract: The paper investigates the relationship between environmental participation and littering. Previous empirical work in the area of littering is scarce as is evidence regarding the determinants of littering behavior. We address these deficiencies, demonstrating a strong empirical link between environmental participation and reduced public littering using European Values Survey (EVS) data for 30 Western and Eastern European countries. The results suggest that membership in environmental organizations strengthens commitment to anti-littering behaviour, thereby supporting improved environmental quality.
    Keywords: littering, environmental participation, environmental preferences, environmental outcomes
    JEL: H26 H73 D64
    Date: 2008–06–17
  11. By: Lars P. Feld; Benno Torgler; Bin Ding
    Abstract: The paper explores whether a social learning model helps explain the observed conformity and compliance with social norms after the unification of Germany. We compare tax morale, (the willingness to pay taxes), between inhabitants of East and West Germany during the post-unification period, using three World Values Survey/European Values Survey waves between 1990 and 1999. German unification is of particular interest in analysing tax morale since it is close to a quasi-natural experiment. Factors such as a common language, similar education systems and a shared cultural and political history prior to the separation after the Second World War can be controlled because they are similar. Our findings indicate that the social learning model employed in this study helps to predict the development of tax morale over time. It is clear that tax morale values converged within a mere nine years after unification, due largely to a strong change in the level of tax morale in the East. Thus, the paper contributes to the literature that attempts to explain how norms arise, how they are maintained and how they are changed.
    Keywords: Tax Morale, Social Learning, Conformity, Convergence Process, Deterrence, Quasi-Natural Experiment
    JEL: H26 H73 D78 C93
    Date: 2008–06–16
  12. By: Strulik, Holger
    Abstract: This article investigates economic performance when enforceable property rights are missing and subsistence needs matter. It shows that if per capita income is sufficiently high, a windfall gain in productivity triggers behavior that leads to higher growth (the normal reaction). The same shock can produce voracious behavior and lower growth when faced by poor economic agents, in particular when their productivity is low and their society is largely fractionalized. This leads to a re-assessment of the voracity effect. Economic and social performance depends no longer on character traits (the assumed curvature of the utility function) as assumed in the earlier literature. Instead, the initial degree of development, the state of technology, and the make up of society are decisive. An extension towards a two-sector economy shows that conditions for an active informal sector of low productivity are much less restrictive than originally thought.
    Keywords: economic growth, property rights, common pool resources, voracity, fractionalization
    JEL: O11 O13 D74 P48
    Date: 2008–06

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.