nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒09‒13
twenty papers chosen by
Fabio Sabatini
University of Siena

  1. Local Social Capital and Geographical Mobility: Some Empirics and a Conjecture on the Nature of European Unemployment By David, Quentin; Janiak, Alexandre; Wasmer, Etienne
  2. Local Social Capital and Geographical Mobility: A Theory By David, Quentin; Janiak, Alexandre; Wasmer, Etienne
  3. Interpersonal Relationships Moderate the Effect of Faces on Person Judgments By Tuk, M.A.; Verlegh, P.W.J.; Smidts, A.; Wigboldus, D.H.J.
  4. Do community-driven development projects enhance social capital ? evidence from the Philippines By Labonne, Julien; Chase, Robert S.
  5. Compliance by believing: an experimental exploration on social norms and impartial agreements By Marco Faillo; Stefania Ottone; Lorenzo Sacconi
  6. Conformity, reciprocity and the sense of justice. How social contract-based preferences and beliefs explain norm compliance: the experimental evidence By Lorenzo Sacconi; Marco Faillo
  7. Exploring the links between HIV/AIDS, social capital, and development By David, Antonio C.; Li, Carmen A.
  8. The Microfoundations of Community: Small Groups as Bridges and Barriers to Participatory Democracy By Islam, Gazi
  9. Two is Company, N is a Crowd? Merchant Guilds and Social Capital By Roberta Dessì; Salvatore Piccolo
  10. Increasing Salesperson Performance With Social Capital: The Impact of Centrality, Tie Strength and Network Diversity By Claro, Danny P.; Gonzalez, Gabriel; Neto, Silvio A. L.
  11. How to be kind? Outcomes versus Intentions as Determinants of Fairness By Luca Stanca
  12. Personality on Social Network Sites: An Application of the Five Factor Model By Stefan Wehrli
  13. Networks with Group Counterproposals By Ricardo Nieva
  14. Trust and Adaptive Learning in Implicit Contracts By Christian Lukas; Jens Robert Schöndube
  15. Objective and subjective indicators of happiness in Brazil: The mediating role of social By Islam, Gazi
  16. A road to trust By Labonne, Julien; Chase, Robert S.
  17. Spite and development By Fehr, Ernst; Hoff, Karla; Kshetramade, Mayuresh
  18. The appearance of homo rivalis: Social preferences and the nature of rent seeking By Benedikt Herrmann; Henrik Orzen
  19. The Framing of Games and the Psychology of Play By Heike Hennig-Schmidt
  20. Attitude-Dependent Altruism, Turnout and Voting By Julio J. Rotemberg

  1. By: David, Quentin (ECARES, Free University of Brussels); Janiak, Alexandre (University of Chile); Wasmer, Etienne (Sciences Po, Paris)
    Abstract: European labor markets are characterized by the low geographical mobility of workers. The absence of mobility is a factor behind high unemployment when jobless people prefer to remain in their home region rather than to go prospecting in more dynamic areas. In this paper, we attempt to understand the determinants of mobility by introducing the concept of local social capital. Using data from a European household panel (ECHP), we provide various measures of social capital, which appears to be a strong factor of immobility. It is also a fairly large factor of unemployment when social capital is clearly local, while other types of social capital are found to have a positive effect on employability. We also find evidence of the reciprocal causality, that is, individuals born in another region have accumulated less local social capital. Finally, observing that individuals in the South of Europe appear to accumulate more local social capital, while in Northern Europe they tend to invest in more general types of social capital, we argue that part of the European unemployment puzzle can be better understood thanks to the concept of local social capital.
    Keywords: European unemployment, geographical mobility, social capital
    JEL: J2 J61 Z1
    Date: 2008–08
  2. By: David, Quentin (ECARES, Free University of Brussels); Janiak, Alexandre (University of Chile); Wasmer, Etienne (Sciences Po, Paris)
    Abstract: In this paper, we attempt to understand the determinants of mobility by introducing the concept of local social capital. Investing in local ties is rational when workers anticipate that they will not move to another region. Reciprocally, once local social capital is accumulated, incentives to move are reduced. Our model illustrates several types of complementarity leading to multiple equilibria (a world of local social capital and low mobility vs. a world of low social capital and high propensity to move). It also shows that local social capital is systematically negative for mobility, and can be negative for employment, but some other types of social capital can actually raise employment.
    Keywords: European unemployment, geographical mobility, social capital
    JEL: J2 J61 Z1
    Date: 2008–08
  3. By: Tuk, M.A.; Verlegh, P.W.J.; Smidts, A.; Wigboldus, D.H.J. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Previous research suggests that people form impressions of others based on their facial appearance in a very fast and automatic manner, and this especially holds for trustworthiness. However, as yet, this process has been investigated mostly in a social vacuum without taking interpersonal factors into account. In the current research, we demonstrate that both the relationship context that is salient at the moment of an interaction and the performed behavior, are important moderators of the impact of facial cues on impression formation. It is shown that, when the behavior of a person we encounter is ambiguous in terms of trustworthiness, the relationship most salient at that moment is of crucial impact on whether and how we incorporate facial cues communicating (un)trustworthiness in our final evaluations. Ironically, this can result in less positive evaluations of interaction partners with a trustworthy face compared to interaction partners with an untrustworthy face. Implications for research on facial characteristics, trust, and relationship theories are discussed.
    Keywords: trust;facial characteristics;person perception;word-of-mouth;relationship norms
    Date: 2008–09–08
  4. By: Labonne, Julien; Chase, Robert S.
    Abstract: This paper explores the social capital impacts of a large-scale, community-driven development project in the Philippines in which communities competed for block grants for infrastructure investment. The analysis uses a unique data set of about 2,100 households collected before the project started (2003) and after one cycle of sub-project implementation (2006) in 66 treatment and 69 matched control communities. Participation in village assemblies, the frequency with which local officials meet with residents and trust towards strangers increased as a result of the project. However, there is a decline in group membership and participation in informal collective action activities. This may have been because households were time-constrained, so that in order to participate in project activities, they needed to temporarily reduce their participation in informal activities. An alternative explanation is that the project improved the efficiency of formal forms of social capital and thus households needed to rely less on informal forms. Finally, the results indicate that, in the short run, the project might have reduced the number of other investments.
    Keywords: Housing&Human Habitats,Access to Finance,Social Accountability,Social Capital,Banks&Banking Reform
    Date: 2008–07–01
  5. By: Marco Faillo; Stefania Ottone; Lorenzo Sacconi
    Abstract: The main contribution of this paper is twofold. First of all, it focuses on the decisional process that leads to the creation of a social norm. Secondly, it analyses the mechanisms through which subjects conform their behaviour to the norm. In particular, our aim is to study the role and the nature of Normative and Empirical Expectations and their influence on people’s decisions. The tool is the Exclusion Game, a sort of ‘triple mini-dictator game’. It represents a situation where 3 subjects – players A - have to decide how to allocate a sum S among themselves and a fourth subject - player B - who has no decisional power. The experiment consists of three treatments. In the Baseline Treatment participants are randomly distributed in groups of four players and play the Exclusion Game. In the Agreement Treatment in each group participants are invited to vote for a specific non-binding allocation rule before playing the Exclusion Game. In the Outsider Treatment, after the voting procedure and before playing the Exclusion Game, a player A for each group (the outsider) is reassigned to a different group and instructed about the rule chosen by the new group. In all the treatments, at the end of the game and before players are informed about the decisions taken during the Exclusion Game by the other co-players, first order and second order expectations (both normative and empirical) are elicited through a brief questionnaire. The first result we obtained is that subjects’ choices are in line with their empirical (not normative) expectations. The second result is that even a non-binding agreement induces convergence of empirical expectations – and, consequently, of choices. The third results is that expectation of conformity is higher in the partner protocol. This implies that a single outsider breaks the ‘trust and cooperation’ equilibrium.
    Keywords: fairness, social norms, beliefs, psychological games, experimental games
    JEL: C72 C91 A13
    Date: 2008
  6. By: Lorenzo Sacconi; Marco Faillo
    Abstract: Compliance with a social norm is a matter of self-enforceability and endogenous motivation to conform, which is relevant not just to social norm,s but also to a wide array of institutions. Here we consider endogenous mechanisms that become effective once the game description has been enriched with pre-play communication allowing impartial agreements on a norm (even if they remain not binding in any sense). Behavioral models understand conformity as the maximization of some “enlarged” utility function properly defined to make room for the individual’s “desire” to comply with a norm reciprocally adhered to by other participants – whose conformity in turn depends on the expectation that the norm will be in fact reciprocally adhered to. In particular this paper presents an experimental study on the “conformity-with-the-ideal preference theory” (Grimalda and Sacconi 2005), based of a simple experimental three person game called the “exclusion game”. If the players participate in a “constitutional stage” (under a veil of ignorance ) in which they decide the rule of division unanimously, the experimental data show a dramatic change in the participants’ behavior pattern. Most of them conform to the fair rule of division to which they have agreed in a pre-play communication stage, whereas in the absence of this agreement they behave egoistically. The paper also argues that this behavior is largely consistent with what John Rawls (1971) called the “sense of justice”, a theory of norm compliance unfortunately overlooked by economists and which should be reconsidered after the behaviorist turn in economics.
    Keywords: conformist preferences, reciprocity, veil of ignorance, psychological games, fairness, experiments
    JEL: C7 C9 D63 D64
    Date: 2008
  7. By: David, Antonio C.; Li, Carmen A.
    Abstract: This paper attempts to quantify the impact of the HIV/AIDS epidemic on social capital with cross-country data. Using data from the World Values Survey, the authors estimate reduced-form regressions of the main determinants of social capital controlling for HIV prevalence, institutional quality, social distance, and economic indicators. The results obtained indicate that HIV prevalence affects social capital negatively. The empirical estimates suggest that a one standard deviation increase in HIV prevalence will lead to a decline of at least 1 percent in trust, controlling for other determinants of social capital. Moving from a country with a relatively low level of HIV prevalence, such as Estonia, to a country with a relatively high level, such as Uganda, there is a more than 11 percent point decline in social capital. These results are robust in a number of dimensions and highlight the empirical importance of an additional mechanism through which HIV/AIDS hinders the development process.
    Keywords: Population Policies,Social Capital,HIV AIDS,Disease Control&Prevention,Inequality
    Date: 2008–07–01
  8. By: Islam, Gazi
    Date: 2008–10
  9. By: Roberta Dessì (Toulouse School of Economics (GREMAQ and IDEI) and CEPR); Salvatore Piccolo (Toulouse School of Economics, University of Naples Federico II and CSEF)
    Abstract: The paper revisits the rationale for the emergence of merchant guilds within a competitive setting accounting for the dynamic incentives of merchants. Differently from previous literature, we focus on the role of local merchant guilds rather than that of alien guilds and investigate a number of hitherto neglected empirical observations concerning their organization. In particular, focusing on the role played by monitoring technologies, instead of capital-constraints, the simple model we develop delivers predictions about guild size, membership restrictions, and their welfare implications. As we show, these are consistent with the available historical evidence, and shed new light on the role of the guilds’ social capital. Moreover, our analysis also provides a theoretical framework capable of accounting for the basic trade-offs involved when a polity’s ruler faces the choice of granting recognition to a single or multiple guilds. This helps understanding the observed distribution of guilds, and provides a rationale for the establishment of both local and alien merchant guilds. Therefore, the paper reconciles, to some extent, the different views put forward in the existing literature.
    Keywords: merchant guild, social capital, collusion, political economy, trade, taxation
    Date: 2008–09–01
  10. By: Claro, Danny P.; Gonzalez, Gabriel; Neto, Silvio A. L.
    Date: 2008–10
  11. By: Luca Stanca
    Abstract: This paper presents an experimental analysis of the role of out comes and intentions for fair behavior. We consider a symmetric version of the gift-exchange game in a 2x2 design with two treatment variables: intentionality (¯rst mover's choice is either intentional or randomly determined) and outcome (¯rst mover's choice is either costly or free, ie compensated by the experimenter). The four treatments differ with respect to the presence-absence of intentionality and cost for the ¯rst mover, whereas the outcome of the ¯rst mover's action for the second mover's payo® is kept constant across treatments. The results indicate that intentions do not matter for fair behavior, whereas outcomes do matter. In particular, the effect of outcomes is due to concerns for distributional fairness, whereas there is no evidence of an intention-based role for outcomes through signalling kindness.
    Keywords: Reciprocity, Export, Intentions, Laboratory Experiments
    JEL: D63 C78 C91
    Date: 2008–07
  12. By: Stefan Wehrli
    Abstract: In this paper we explore how individual personality characteristics influence online social networking behavior. We use data from an online survey with 1560 respondents from a major Swiss technical university and their corresponding online profiles and friendship networks on a popular Social Network Site (SNS). Apart from sociodemographic variables and questions about SNS usage, we collected survey data on personality traits with a short question inventory of the Five Factor Personality Model (BFI-15). We show how these psychological network antecedents influence participation, adoption time, nodal degree and ego-network growth over a period of 4 months on the networking platform. Statistical analysis with overdispersed degree distribution models identifies extraversion as a major driving force in the tie formation process. We find a counter-intuitive positive effect for neuroticism, a negative influence for conscientiousness and no effects for openness and agreeableness.
    Keywords: online social networks, personality, Big Five, degree distribution
    JEL: D85
    Date: 2008–09–05
  13. By: Ricardo Nieva (University of Minnesota)
    Abstract: We study two n-player sequential network formation games with externalities. Link formation is tied to simultaneous transfer selection in a Nash demand like game in each period. Players in groups can counterpropose. We give necessary and sufficient conditions for efficiency in terms of cyclical monotonicity. The n-player group version always yields efficiency.
    Keywords: Efficiency, Bargaining Protocol, Counterproposals, Network Formation, Transfers, Externalities, Groups, Coalitions
    JEL: C71 C72 C73 C78
    Date: 2008–07
  14. By: Christian Lukas (Faculty of Law, Economics and Politics, University of Konstanz); Jens Robert Schöndube (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: We study e¤ects of trust in implicit contracts. Trust changes whenever the principal honors or dishonors an implicit contract. Usually a higher discount rate lowers the value of trade in an agency. We show that a su¢ ciently high level of (ex ante) trust can o¤set this ef- fect. Strategies of principals representing unique equilibria are endogenously derived given di¤erent levels of agents’bounded rationality. These strategies mirror a subset of the class of trigger strategies which is exogenously entered into previous implicit contracting models. Therefore our results o¤er some justi…cation for using that conventional approach. Implications for performance evaluation are discussed.
    Keywords: trust, implicit contracts, bounded rationality, adaptive learning, trigger strate- gies, game theory
    JEL: D8 D81 M12 M
    Date: 2008–06
  15. By: Islam, Gazi
    Date: 2008–10
  16. By: Labonne, Julien; Chase, Robert S.
    Abstract: The authors explore the relationship between transaction costs and generalized trust. Using panel data from 2,100 households in 135 rural communities of the Philippines, the paper shows that where transaction costs are reduced (proxied by road construction), there is an increase in generalized trust. Consistent with the argument that generalized trust is built through repeated interactions, the authors find that the individuals most likely to engage in exchange exhibit an increase in trust after road construction. These results suggest that, rather than being an input to economic growth, trust might be a product of reduced transaction costs (which also favors growth).
    Keywords: Post Conflict Reconstruction,Transport Economics Policy&Planning,Rural Roads&Transport,Social Capital,Corporate Law
    Date: 2008–09–01
  17. By: Fehr, Ernst; Hoff, Karla; Kshetramade, Mayuresh
    Abstract: In a wide variety of settings, spiteful preferences would constitute an obstacle to cooperation, trade, and thus economic development. This paper shows that spiteful preferences - the desire to reduce another's material payoff for the mere purpose of increasing one's relative payoff - are surprisingly widespread in experiments conducted in one of the least developed regions in India (Uttar Pradesh). In a one-shot trust game, the authors find that a large majority of subjects punish cooperative behavior although such punishment clearly increases inequality and decreases the payoffs of both subjects. In experiments to study coordination and to measure social preferences, the findings reveal empirical patterns suggesting that the willingness to reduce another's material payoff - either for the sake of achieving more equality or for the sake of being ahead - is stronger among individuals belonging to high castes than among those belonging to low castes. Because extreme social hierarchies are typically accompanied by a culture that stresses status-seeking, it is plausible that the observed social preference patterns are at least partly shaped by this culture. Thus, an exciting question for future research is the extent to which different institutions and cultures produce preferences that are conducive or detrimental to economic development.
    Keywords: Economic Theory&Research,Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Gender and Social Development
    Date: 2008–05–01
  18. By: Benedikt Herrmann (University of Nottingham); Henrik Orzen (University of Nottingham)
    Abstract: While numerous experiments demonstrate how pro-sociality can influence economic decision-making, evidence on explicitly anti-social economic behavior has thus far been limited. In this paper we investigate the importance of spite in experimental rent-seeking contests. Although, as we show, existing evidence of excessive rent-seeking is in theory compatible with fairness considerations, our social preference elicitations reveal that subjects’ investments are driven by spite, not fairness or reciprocity. We also observe a striking disconnect between individuals’ revealed social preferences in our contest game and in a standard prisoner’s dilemma, rejecting the idea that there are consistent pro-social, selfish or anti-social “types”. Moreover, we find that cooperation and reciprocity rates drop substantially after subjects have been exposed to rent-seeking competition.
    Keywords: Contests; Other-regarding preferences; Experiments
    JEL: A13 C9 D0 D72
    Date: 2008–08
  19. By: Heike Hennig-Schmidt
    Abstract: Psychological game theory can help provide a rational choice explanation of framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically, and explore the empirical relevance experimentally. In a 2×2 design of one-shot public good games we show that frames affect subject’s first- and second-order beliefs, and contributions. From a psychological game-theoretic framework we derive two mutually compatible hypotheses about guilt aversion and reciprocity under which contributions are related to second- and first-order beliefs, respectively. Our results are consistent with either.
    Keywords: Framing, psychological games, guilt aversion, reciprocity, public good games, voluntary cooperation
    JEL: C91 C72 D64 Z13
    Date: 2008–07
  20. By: Julio J. Rotemberg
    Abstract: This paper presents a goal-oriented model of political participation based on two psychological assumptions. The first is that people are more altruistic towards individuals that agree with them and the second is that people's well-being rises when other people share their personal opinions. The act of voting is then a source of vicarious utility because it raises the well-being of individuals that agree with the voter. Substantial equilibrium turnout emerges with nontrivial voting costs and modest altruism. The model can explain higher turnout in close elections as well as votes for third-party candidates with no prospect of victory. For certain parameters, these third party candidates lose votes to more popular candidates, a phenomenon often called strategic voting. For other parameters, the model predicts "vote-stealing" where the addition of a third candidate robs a viable major candidate of electoral support.
    JEL: D64 D72
    Date: 2008–09

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