nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒07‒20
fourteen papers chosen by
Fabio Sabatini
University of Siena

  1. Relational Goods, Sociability, and happiness By Leonardo Becchetti; Alessandra Pelloni; Fiammetta Rossetti
  2. Cooperation in local and global groups By Gerlinde Fellner; Gabriele K. Lünser
  3. I Can’t Smile Without You: Spousal Correlation in Life Satisfaction By N Powdthavee
  4. Determinants of Trust in the European Central Bank By Justina Fischer; Volker Hahn
  5. Heterogeneous Social Preferences and the Dynamics of Free Riding in Public Good Experiments By Urs Fischbacher; Simon Gaechter
  6. Crime, Poverty and Police Corruption in Developing Countries By Jens Chr. Andvig; Odd-Helge Fjeldstad
  7. Kinship and friendship in a trust game with third party punishment By Björn Vollan
  8. Giving it now or later: altruism and discounting By Jaromir Kovarik
  9. Social Entrepreneurship in the Context of Romania’s European Integration By BIBU, Nicolae Aurelian; ORHEI, Loredana
  10. Corporate Social Responsibility and Wage Discrimination in Unionized Oligopoly By Minas Vlassis; Nick Drydakis
  11. Rational Forecasts or Social Opinion Dynamics? Identification of Interaction Effects in a Business Climate Survey By Lux, Thomas
  12. Measuring “Awareness of Environmental Consequences”: Two Scales and Two Interpretations By Anthony Ryan; Clive L Spash
  13. Moral Behavior in Stock Markets: Islamic finance and socially responsible investment By Pitluck, Aaron Z.
  14. Information Sharing Networks in Oligopoly By Sergio Currarni; Francesco Feri

  1. By: Leonardo Becchetti (Faculty of Economics, University of Rome "Tor Vergata"); Alessandra Pelloni (Faculty of Economics, University of Rome "Tor Vergata"); Fiammetta Rossetti (Faculty of Economics, University of Rome "Tor Vergata")
    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.
    Date: 2008–07–14
  2. By: Gerlinde Fellner (Department of Economics, Vienna University of Economics & B.A.); Gabriele K. Lünser (University College London, Department of Economics & ELSE)
    Abstract: Multiple group memberships are the rule rather than the exception. Locally operating groups frequently offer the advantage of providing social recognition and higher marginal benefits to the individual, whereas globally operating groups may be more beneficial from a social perspective. Within a voluntary contribution environment we experimentally investigate the tension that arises when subjects belong to a smaller local and a larger global group. When the global public good is more efficient individuals first attempt to cooperate in the global public good. However, this tendency quickly unravels and cooperation in the local public good builds up.
    JEL: C92 D71 D82 H41
    Date: 2008–07
  3. By: N Powdthavee
    Abstract: This paper studies how spouses' life satisfaction levels are correlated. Using the British Household Panel Survey, it tests whether the observed positive correlation in life satisfaction is due to assortative mating, shared social environment, or spillover effect of well-being between partners. There is evidence of a positive and statistically important correlation between partners' well-being, even after controlling for omitted individual fixed effects and allowing cross-equation residuals to be correlated. This is consistent with the idea of well-being spillovers within marriage. Moreover, consistent with the spillover effect model, marital dissolution at t+1 is negatively correlated with partners' life satisfaction at t.
    Keywords: Life Satisfaction, Assortative Mating, Spillover, Marriage, Longitudinal
    JEL: D1 D62 D64 I0
    Date: 2008–07
  4. By: Justina Fischer; Volker Hahn
    Keywords: ECB, trust, European Union, Eurobarometer, panel data, behavioral economics
    Date: 2008
  5. By: Urs Fischbacher; Simon Gaechter
    Keywords: Public goods experiments, social preferences, conditional cooperation, free riding
    Date: 2008
  6. By: Jens Chr. Andvig; Odd-Helge Fjeldstad
    Abstract: Crime and the fear of being hit by crime and small-scale violence are key economic and social problems in most developing countries, not least felt strongly by the poor. Extensive corruption in the police, experienced or perceived, contributes seriously to the problem. A key question raised in the paper is: How is police corruption linked to the wider processes of development - including crime, violence and poverty? The paper examines (i) how and why corruption may arise in the daily routines of the police and whether it may have impacts on crime rates; (ii) empirical indications of whether the police may be more corrupt than other groups of public officials; (iii) how and why police corruption may vary across countries; and (iv) the wider impacts of police corruption on development
    Keywords: Corruption Crime Police Poverty JEL classification: D73, K42, O17
    Date: 2008
  7. By: Björn Vollan (Philipps-University Marburg/University of Mannheim)
    Abstract: This paper reports on a set of trust games with third party punishment (TPP) where participants are either family members or friends or unrelated villagers. The experimental sessions were carried out in southern Namibia (Karas) and the bordering northern South Africa (Namaqualand). The aim was to test several hypotheses derived from kin selection theory as well as to assess the importance of third party punishment for encounters among family members and friends. Building on Hamilton, (1964) it was proposed by e.g. Madsen et al., (2007) that kinship is the baseline behaviour among humans. Thus, I use kinship as basis for comparison of how we treat friends and unrelated people and when there is the possibility to punish free-riding behaviour. It turns out that kinship is the baseline behaviour when no other features are available to humans. However, a personal exchange among friends that has a third party observer performs better than a personal exchange among family members without third party punishment. Contributions to family members can substantially be increased by third party punishment. Thus, human ability to sustain a norm by punishing freeriders at personal costs could also have played an important role in sustaining co-operation among kin.
    Keywords: Trust, field experiment, third party punishment, kinship, friendship
    Date: 2008
  8. By: Jaromir Kovarik (Universidad de Alicante)
    Abstract: We experimentally study the e¤ect of time on altruism. By postponing payments in a standard Dictator game, subjects allocate a future payment between themselves and others. Since both the payoffs of the Dictator and the Receiver are delayed until the same time, standard intertemporal utility maximization would predict that waiting time should not affect the Dictator's choice. In this respect, we observe that Dictators' decisions are not affected, as long as the time interval between the decision and payment is not large. On the other hand, for large time gaps, subjectsbecome more self-interested.
    Keywords: Altruism, Discounting, Dictator game, Intertemporal choice.
    JEL: C91 D64 D90
    Date: 2008–06
  9. By: BIBU, Nicolae Aurelian; ORHEI, Loredana
    Abstract: The social sector or social economy is still at a developing stage and the concept of social entrepreneurship is just in the emergence phase in Romania. There is still a lot to do in this field, in order to create sustainability among the actors of the social economy or social sector. The paper will attempt to emphase the differences between entrepreneurship in NGO’s and social entrepreneurship and clarify the two terms in relationship with the Romanian social sector and what needs to be taken into consideration for the future development of this sector in Romania, in the context of EU membership.
    Keywords: social entrepreneurship; non-profit organization; social enterprise; sustainability
    JEL: M14 L30 L31 M13 L33
    Date: 2008–05–30
  10. By: Minas Vlassis (Department of Economics, University of Crete, Greece); Nick Drydakis (Department of Economics - University of Crete, Greece)
    Abstract: The European labour markets are characterized by the existence of trade unions with extensive coverage whereas wage contracts are typically determined through decentralized firm-union bargaining. On the other hand, as it particularly refers to migrant and ethnic minority groups, equally-skilled workers often face lower reservation wages. We argue that these facts may lead unions to opt for discriminatory wage contracts across groups of employees. At the same time firms may nonetheless opt for non-discrimination in wages insofar as they would profitably “advertise” it as an exertion of corporate social responsibility (csr). We show that, if the consumers’ valuation of non-discrimination is sufficiently high, the latter strategies would as well be compatible with the unions’ best interest in the equilibrium. Otherwise, we propose that to efficiently combat wage discrimination policy makers should instead of firms undertake csradvertisement in the event of non-discrimination. Yet, such an antidiscrimination policy would always entail a net loss in social welfare.
    Keywords: Unions, Oligopoly, Discriminatory Wage Contracts, Antidiscrimination Policy, Corporate Social Responsibility.
    JEL: C72 L15 L21 L22
    Date: 2008
  11. By: Lux, Thomas
    Abstract: This paper develops a methodology for estimating the parameters of dynamic opinion or expectation formation processes with social interactions. We study a simple stochastic framework of a collective process of opinion formation by a group of agents who face a binary decision problem. The aggregate dynamics of the individuals' decisions can be analyzed via the stochastic process governing the ensemble average of choices. Numerical approximations to the transient density for this ensemble average allow the evaluation of the likelihood function on the base of discrete observations of the social dynamics. This approach can be used to estimate the parameters of the opinion formation process from aggregate data on its average realization. Our application to a well-known business climate index provides strong indication of social interaction as an important element in respondents' assessment of the business climate.
    Keywords: business climate, business cycle forecasts, opinion formation, social interactions
    JEL: C42 D84 E37
    Date: 2008
  12. By: Anthony Ryan; Clive L Spash (CSIRO Sustainable Ecosystems, Australia)
    Abstract: Moderate or poor reliabilities, worrisome correlation patterns and ambiguous dimensionality raise questions about the awareness of consequences scale being a valid measure of egoistic, social-altruistic and biospheric value orientations. These results may, however, indicate something else. An exploratory analysis performed on three samples collected from the general public provides evidence for a reinterpretation of the scale. We believe the concepts of egoistic, social and biospheric value orientations remain important as a potential explanation of behaviour. However, our results imply that whether people cognitively organise their beliefs in this way when considering adverse environmental consequences requires a different approach from the current awareness of consequences scale. The evidence shows the current scale must be reinterpreted as a measure of concern over the positive and negative consequences of environmental action and inaction.
    Keywords: environmental beliefs, value orientations, environmental scales, egoistic, altruistic, biospheric, value-belief-norm model
    JEL: D46 D64 D83
    Date: 2008–07
  13. By: Pitluck, Aaron Z.
    Abstract: This paper addresses the puzzle of why the inclusion of non-financial social justice or religious criteria by professional fund managers has been so popular in Malaysia and yet has had to date relatively little influence in the United States stock market. Drawing from over 125 ethnographic interviews with financial workers in Malaysia, this paper argues that moral investment behavior in stock markets is shaped primarily by ‘market structure’ rather than by ‘mandates.’ In both countries mandates are a weak form of social control of fund manager’s behavior. This is because mandates are not principal-agent contracts but are primarily marketing exercises and cultural tools. Social investing in the United States is weak because it relies solely on mandates to communicate clients’ ethical desires to their fund managers. Islamic and Ethical finance in Malaysia is strong because Islamic social movements have reformed the Malaysian stock market’s structure. Specifically, a uniform interpretation of Islamic investing was institutionalized with the creation of a nearly-unique quasi-governmental body. As a consequence, Islamic principles systematically influence the behavior of corporations listed in Malaysia, at present narrowly, but with the potential for wider influence in future. The paper closes with implications for social investment in the United States.
    Keywords: Investor Behavior; Ethics; Malaysia; United States; Islamic Finance; Socially Responsible Investment
    JEL: G11 O53 Z10 G20 A13 A14 P52
    Date: 2008–03–15
  14. By: Sergio Currarni (Department of Economics, University Of Venice Cà Foscari); Francesco Feri (University of Innsbruck)
    Abstract: We study the incentives of oligopolistic firms to share private information on demand parameters. Differently from previous studies, we consider bilateral sharing agreements, by which firms commit at the ex-ante stage to truthfully share information. We show that if signals are i.i.d., then pairwise stable networks of sharing agreements are either empty or made of fully connected components of increasing size. When linking is costly, non complete components may emerge, and components with larger size are less densly connected than components with smaller size. When signals have different variances, incomplete and irregular network can be stable, with firms observing high variance signals acting as "critical nodes". Finally, when signals are correlated, the empty network may not be pairwise stable when the number of firms and/or correlation are large enough.
    Keywords: Information sharing, oligopoly, networks, Bayesian equilibrium
    JEL: D43 D82 D85 L13
    Date: 2008

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