nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2008‒10‒21
twenty papers chosen by
Fabio Sabatini
University of Siena

  1. Family types and the persistence of regional disparities in Europe By Gilles Duranton; Andrés Rodríguez-Pose; Richard Sandall
  2. Fear of Crime: Does Trust and Community Participation Matter? By Pavel Luengas; Inder J. Ruprah
  3. The not so dark side of trust: Does trust increase the size of the shadow economy? By Johanna D'Hernoncourt; Pierre-Guillaume Méon
  4. A Theoretical Analysis of the Relationship between Social Capital and Corporate Social Responsibility: Concepts and Definitions By Giacomo Degli Antoni; Lorenzo Sacconi
  5. Compliance by Believing: An Experimental Exploration on Social Norms and Impartial Agreements By Marco Faillo; Stefania Ottone; Lorenzo Sacconi
  6. Measuring the Importance of Labor Market Networks By Hellerstein, Judith K.; McInerney, Melissa; Neumark, David
  7. Social Interactions, Network Fluidity and Network Effects By Catherine Tucker; ;
  8. Two is Company, N is a Crowd? Merchant Guilds and Social Capital By DESSI, Roberta; PICCOLO, Salvatore
  9. Altruism, Partner Choice, and Fixed-Cost Signalling By Andriy Zapechelnyuk; Ro’'i Zultan
  10. Entrepreneurial Innovations in Network Industries By Pehr-Johan Norbäck; Lars Persson; Joacim Tåg
  11. Ashamed to be Selfish By David Dillenberger; Philipp Sadowski
  12. Network Structure and Strategic Investments: An Experimental Analysis By Stephanie Rosenkranz; Utz Weitzel
  13. Are Social Networking Sites a Source of Online Harassment for Teens? Evidence from Survey Data By Anirban Sengupta; Anoshua Chaudhuri;
  14. Who's Who in Networks. Wanted: the Key Group By Umed Temurshoev; ;
  15. The Italian Job: Match Rigging, Career Concerns and Media Concentration in Serie A By Boeri, Tito; Severgnini, Battista
  16. To What Extent do Latin Americans Trust and Cooperate? Field Experiments on Social Exclusion In Six Latin American Countries By Alberto Chong Author-X-Name_First: Alberto Author-X-Name_Last: Chong; Hugo Ñopo Author-X-Name_First: Hugo Author-X-Name_Last: Ñopo; Juan Camilo Cardenas Author-X-Name_First: Juan Camilo Author-X-Name_Last: Cardenas
  17. Computer Virus Propagation in a Network Organization: The Interplay between Social and Technological Networks By Hsing Kenneth Cheng; Hong Guo;
  18. Ad-sponsored Business Models and Compatibility Incentives of Social Networks By Feng Zhu
  19. What You Don't Know Won't Hurt You: A Laboratory Analysis of Betrayal Aversion By Jason Aimone; Daniel Houser
  20. Political Participation and Quality of Life By Rebecca Weitz-Shapiro Author-X-Name_First: Rebecca Author-X-Name_Last: Weitz-Shapiro; Matthew S. Winters Author-X-Name_First: Matthew S. Author-X-Name_Last: Winters

  1. By: Gilles Duranton (University of Toronto); Andrés Rodríguez-Pose (London School of Economics); Richard Sandall (London School of Economics)
    Abstract: This paper examines the association between one of the most basic institutional forms, the family, and a series of demographic, educational, social, and economic indicators across regions in Europe. Using Emmanuel Todd’s classification of medieval European family systems, we identify potential links between family types and regional disparities in household size, educational attainment, social capital, labor participation, sectoral structure, wealth, and inequality. The results indicate that medieval family structures seem to have influenced European regional disparities in virtually every indicator considered. That these links remain, despite the influence of the modern state and population migration, suggests that either such structures are extremely resilient or else they have in the past been internalized within other social and economic institutions as they developed.
    Keywords: institutions; family types; education; social capital; labor force
    JEL: J12 O18 R11
    Date: 2008–10–08
  2. By: Pavel Luengas (Office of Evaluation and Oversight at the Interamerican Development Bank.); Inder J. Ruprah (Office of Evaluation and Oversight at the Interamerican Development Bank.)
    Abstract: This paper examines the association between trust and community involvement with fear of crime. Fear of crime is measured by three typical perception measures: neighborhood security; walking alone in the dark; and the risk of becoming a victim. The data is from Chile’s Victimization Survey. The techniques used are a multinomial regression and an impact –propensity score single difference- calculation. We find that while trust matters participation generally does not for fear. However, regressions leave open the direction of causality. An impact calculation confirms that participation in a neighborhood crime prevention program does not affect the fear of crime. Thus the evidence challenges the general idea that involvement in one’s community and the specific idea of community participation in neighborhood crime prevention programs reduce fear and increase feelings of safety.
    Keywords: Fear of crime, perceived safety, trust, community participation, multinomial logit regression, impact evaluation
    JEL: I31 I38 K14 H43
    Date: 2008–07
  3. By: Johanna D'Hernoncourt (CEESE, Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); Pierre-Guillaume Méon (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and DULBEA, Université Libre de Bruxelles, Brussels.)
    Abstract: This paper studies the relationship between the size of the shadow economy and generalized trust, on a cross-section of countries, both developed and developing, and finds that it is significantly negative. That relationship is robust to controlling for a large set of economic, policy, and institutional variables, to changing the estimate of the shadow economy and the estimation period, and to controlling for endogeneity. It is independent from trust in institutions. We provide evidence that it is mainly present in the sample of developing countries.
    Keywords: Shadow economy, informal sector, trust.
    JEL: O11 O17 O57 H26 Z13
    Date: 2008–10
  4. By: Giacomo Degli Antoni (University of Milano-Bicocca); Lorenzo Sacconi (University of Trento - Department of Economics)
    Abstract: Trust, trustworthiness and ethical norms of reciprocity and cooperation have been receiving more and more attention in economic analysis. In particular, two concepts have been widely used in order to study the socio-economic effects of these factors: the concept of social capital (hereafter also SC) and of corporate social responsibility (hereafter also CSR). Even though SC and CSR seem to be linked by many common elements related to the quality and quantity of social relations between agents, their relationship has not been deeply investigated yet. This paper is aimed at shedding light on some aspects of this relationship, in particular, by investigating the idea of a virtuous circle, between the level of SC and the implementation of CSR practices, that fosters socio-economic development by generating social inclusion and social networks based on trust and trustworthiness. Following the literature on SC that stresses its multidimensional character (e.g. Paldam 2000), we consider two dimensions of this notion. Starting from the distinction introduced by Uphoff (1999), we take into account a cognitive and a structural idea of SC. The first one essentially refers to the dispositional characters of agents that affect their propensity to behave in different ways. The latter refers to social networks connecting agents. With regard to the concept of CSR, we adopt a contractarian approach and consider CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm's stakeholders. Among stakeholders, we distinguish between strong and weak stakeholders. Both these two categories have made specific investments in the firm. However, strong stakeholders are precious for the firm because they bring in strategic assets. They are, for example, skilled workers or institutional investors. On the contrary, weak stakeholders do not bring strategic assets into the firm and firms have material incentives at defecting in the relationship with them. They are, for example, unskilled workers. Considering the notions of cognitive and structural SC and a contractarian approach to CSR, we show that: a) the level of cognitive SC plays a key role in inducing the firm to adopt and observe CSR practices that respect all the stakeholders; b) the decision of adopting formal instruments of CSR contributes to create cognitive SC that is endogenously determined in the model; c) the level of cognitive SC and the decision of adopting CSR practices creates structural SC in terms of a long term relationship between the firm and the weak and strong stakeholders.
    Keywords: social capital, social norms, reputation, CSR, reciprocity, network, trust
    JEL: D23 L21 M14 Z10
    Date: 2008–03
  5. By: Marco Faillo (University of Trento - Faculty of Economics); Stefania Ottone (Università degli Studi di Milano-Bicocca); Lorenzo Sacconi (University of Trento - Faculty of Economics)
    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: 2008–07
  6. By: Hellerstein, Judith K. (University of Maryland); McInerney, Melissa (College of William and Mary); Neumark, David (University of California, Irvine)
    Abstract: We specify and implement a test for the importance of network effects in determining the establishments at which people work, using recently-constructed matched employer-employee data at the establishment level. We explicitly measure the importance of network effects for groups broken out by race, ethnicity, and various measures of skill, for networks generated by residential proximity. The evidence indicates that labor market networks play an important role in hiring, more so for minorities and the less-skilled, especially among Hispanics, and that labor market networks appear to be race-based.
    Keywords: networks, race, ethnicity, immigrants
    JEL: J15 J61
    Date: 2008–10
  7. By: Catherine Tucker (MIT Marketing); ;
    Abstract: This paper asks how much the strength of network effects depends on the stability and structure of the underlying social network. I answer this using extensive micro-data on all potential adopters of a firm's internal video-messaging system and their subsequent video-messaging. This firm's New York office had to be relocated due to the terrorist attacks of 2001 which lead to a physical re-organization of teams in that city but not in other comparable cities. I study the consequences of this disruption for adoption of video-messaging and the size of network effects. I find evidence that generally network effects are based on direct social interactions. Potential adopters react to adoption only by people they wish to communicate with: They are not affected by adoption by other people. However, when there is a disruption to the social network and communication patterns become less predictable, users become more responsive to adoption by a broader group of users.
    Keywords: Network Effects, Local Networks, Stability, Option-Value
    JEL: K21 Q31 Q34 L42 L40 L12
    Date: 2008–10
  8. By: DESSI, Roberta; PICCOLO, Salvatore
    Date: 2008–09
  9. By: Andriy Zapechelnyuk; Ro’'i Zultan
    Date: 2008–10–12
  10. By: Pehr-Johan Norbäck (Research Institute of Industrial Economics (IFN)); Lars Persson (Research Institute of Industrial Economics (IFN)); Joacim Tåg (Research Institute of Industrial Economics (IFN))
    Abstract: In this paper, we study entrepreneurial innovations in an industry characterized by network effects. We show that the presence of network externalities tends to make the entrepreneur prefer sale to entry. Moreover, we also show that the incentive to innovate for entry decreases when network effects become stronger, whereas there is an increase in the incentive for innovation for sale. Moreover, we show that increasing the degree of industry-wide standardization furthers the goal of increasing entry by entrepreneurs. However, this may come at the cost of reducing the research intensity by reducing the bidding competition among incumbents over the innovations of entrepreneurs.
    Keywords: Entrepreneurship, Entry, Compatibility, Innovation, Network Effects, Standardization.
    JEL: D40 L10
    Date: 2008–09
  11. By: David Dillenberger (Department of Economics, University of Pennsylvania); Philipp Sadowski (Department of Economics, Duke University)
    Abstract: We study a two-stage choice problem, where alternatives are allocations between the decision maker (DM) and a passive recipient. The recipient observes choice behavior in stage two, while stage one choice is unobserved. Choosing selfishly in stage two, in the face of a fairer available alternative, may inflict shame on DM. DM has preferences over sets of alternatives that represent period two choices. We axiomatize a representation that identifies DM’s selfish ranking, her norm of fairness and shame. Altruism is the most prominent motive that can explain non-selfish choice. We identify a condition under which shame to be selfish can mimic altruism, when only stage-two choice is observed by the experimenter. An additional condition implies that the norm of fairness can be characterized as the Nash solution of a bargaining game induced by the second-stage choice problem. The representation is generalized to allow for finitely many recipients and applied to a simple strategic situation, a game of trust.
    Keywords: selfishness, fairness, shame, altruism
    JEL: C78 D63 D64 D80 D81
    Date: 2008–10–10
  12. By: Stephanie Rosenkranz; Utz Weitzel
    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 Bramoulle 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: networks, experiment, coordination, strategic substitutes, risk aversion
    JEL: C91 D00 D81 D85 C72 H41
    Date: 2008–05
  13. By: Anirban Sengupta (Analysis Group, Inc); Anoshua Chaudhuri (Department of Economics, San Francisco State University, San Francisco);
    Abstract: Media reports on incidences of abuse on the internet, particularly amongst teenagers, are growing at an alarming rate causing much concern among parents of teenagers and legislations aimed at regulating internet use among teenagers. Past studies have found that one in five youth were exposed to sexual solicitation, one in seventeen were harassed or threatened and only a fraction reported these cases while more than 63% reported being upset, embarrassed or stressed as a result of these unwanted contacts. Social networking sites (SNS) have been blamed to be a major source of harassment for teen users. Despite several media reports, there is a serious paucity of research in this area that explicitly identifies risk factors that make teens prone to internet abuse, and strategies for prevention and intervention. This study examines the extent to which internet use and having SNS site memberships result in incidences of stranger contact and online harassment for teens in the United States. We also determine the characteristics of teens that make them more likely to be victims of online harassment. Using parental background information, we also seek to shed light on the relationship between parental awareness and teen abuse on the internet. We use 2006 round of Pew Internet™ American Life Survey for this study. Since data on social networking has been collected fairly recently and we do not have any past information, the limitation of this study is that we cannot draw causal links between internet use and online harassment.
    Keywords: Online harassment, social networking sites (SNS), cyber-bullying, youth risky behaviors
    JEL: I0 L86
    Date: 2008–09
  14. By: Umed Temurshoev (Department of Economics and SOM Research School, University of Groningen); ;
    Abstract: Ballester, Calvo-Armengol, and Zenou (2006, Econometrica, 74/5, pp. 1403-17) show that in a network game with local payoff complementarities, together with global uniform payoff substitutability and own concavity effects, the intercentrality measure identifies the key player - a player who, once removed, leads to the optimal change in overall activity. In this paper we search for the key group in such network games, whose members are, in general, different from the players with the highest individual intercentralities. Thus the quest for a single target is generalized to a group selection problem targeting an arbitrary number of players, where the key group is identified by a group intercentrality measure. We show that the members of a key group are rather nonredundant actors, i.e., they are largely heterogenous in their patterns of ties to the third parties.
    Keywords: social networks, centrality measures, intercentrality measures, clusters, policies
    JEL: A14 C72 L14
    Date: 2008–09
  15. By: Boeri, Tito (Bocconi University); Severgnini, Battista (Humboldt University, Berlin)
    Abstract: This paper contributes to the literature on competition and corruption, by drawing on records from Calciopoli, a judicial inquiry carried out in 2006 on corruption in the Italian soccer league. Unlike previous studies, we can estimate the determinants of match rigging and use this information in identifying corruption episodes in years in which there are no pending judicial inquiries. We find evidence of corruption activity well before Calciopoli. Career concerns of referees seem to play a major role in match rigging. An implication of our study is that a more transparent selection of the referees and evaluation of their performance is essential in removing incentives to match rigging. Another implication is that in presence of significant "winners-take-all" effects, more competitive balance may increase corruption unless media concentration is also significantly reduced.
    Keywords: concentration, corruption, career concerns, random effect ordered probit, Monte Carlo simulations, soccer
    JEL: D73 L82 L83
    Date: 2008–10
  16. By: Alberto Chong Author-X-Name_First: Alberto Author-X-Name_Last: Chong; Hugo Ñopo Author-X-Name_First: Hugo Author-X-Name_Last: Ñopo; Juan Camilo Cardenas Author-X-Name_First: Juan Camilo Author-X-Name_Last: Cardenas
    Abstract: This paper explores the extent to which individuals trust, reciprocate, cooperate and pool risk by using a battery of field experiments containing the trust game, the voluntary contributions mechanism and the risk pooling game; applied in six capital cities in Latin America. The results suggest that: (i) on average, the propensity to trust and cooperate among Latin Americans is remarkably similar to that found in other regions of the world; (ii) expectations about the behavior of other players are the main driver of trust, reciprocity and cooperation; and (iii) behaviors involving socialization, trust and cooperation are closely interconnected.
    Date: 2008–04
  17. By: Hsing Kenneth Cheng (Department of Information Systems & Operations Management, University of Florida); Hong Guo (Department of Information Systems & Operations Management, University of Florida);
    Abstract: This paper proposes a holistic view of a network organization’s computing environment to examine computer virus propagation patterns. We empirically examine a large-scale organizational network consisting of both social network and technological network. By applying information retrieval techniques, we map nodes in the social network to nodes in the technological network to construct the composite network of the organization. We apply social network analysis to study the topologies of social and technological networks in this organization. We statistically test the impact of the interplay between social and technological network on computer virus propagation using a susceptible-infective-recovered epidemic process. We find that computer viruses propagate faster but reach lower level of infection through technological network than through social network, and viruses propagate the fastest and reach the highest level of infection through the composite network. Overlooking the interplay of social network and technological network underestimates the virus propagation speed and the scale of infection.
    Keywords: social network analysis, interplay between social and technological networks, computer viruses
    JEL: C15 D85 C89
    Date: 2008–10
  18. By: Feng Zhu (Marshall School of Business, University of Southern California)
    Abstract: This paper examines social networks' incentives to establish compatibility under fee and ad-sponsored business models. I analyze the competition between two social networks and show that compatibility is only possible when the two networks are ad-sponsored. I also find that even when both networks are ad-sponsored, a network with a significant installed-base advantage may choose not to be compatible when the cost from sharing the market outweighs the benefit from additional ad profits. Finally, compatibility also requires a significant number of single-homing users. The results are consistent with empirical observations of social networks and suggest that increased adoption of ad-sponsored business models may lead to many de-facto standards in high-technology industries.
    Keywords: Ad-sponsored, Compatibility, Social networks, Business models
    JEL: L15 L10 M21
    Date: 2008–09
  19. By: Jason Aimone (Interdsciplinary Center for Economic Science, George Mason University); Daniel Houser
    Abstract: Trust promotes economic growth and development, and previous research has shed much light on reciprocity and other motives for trusting decisions. Why people choose not to trust has received substantially less attention, perhaps in part because not trusting is predicted by standard economic theory: selfish people consider the (perhaps subjective) stochastic nature of the environment and make the earnings-maximizing decision. This explanation is incomplete: we provide evidence from a laboratory analysis with an investment game that people¡¯s decisions vary according to how an environment¡¯s uncertainty will be resolved. In particular, if resolving uncertainty requires an investor to learn whether her trustee chose to betray then she is much less likely to trust. Our data thus provide evidence that ¡°betrayal aversion¡± detrimentally affects propensities for trusting decisions. Our results also emphasize the importance of impersonal, institution-mediated exchange in promoting investment and economic efficiency.
    Date: 2008–09
  20. By: Rebecca Weitz-Shapiro Author-X-Name_First: Rebecca Author-X-Name_Last: Weitz-Shapiro; Matthew S. Winters Author-X-Name_First: Matthew S. Author-X-Name_Last: Winters
    Abstract: Theoretical literatures on procedural utility and the psychological benefits of political participation suggest that people who participate in political activities will be more satisfied with their lives because of the resulting feelings of autonomy, competence and relatedness. Individual-level data from Latin America show—in one dataset under study but not in another—a positive and statistically significant relationship between voting and life satisfaction. Variation in desire to vote as measured in Costa Rica, however, suggests that the causal arrow may run from happiness to voting. The use of multilevel models further reveals a consistent—but untheorized—cross-country negative relationship between enforced compulsory voting and happiness. Only preliminary results are found regarding the relationship between some other forms of political participation and life satisfaction.
    Date: 2008–07

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.