nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒01‒31
fifteen papers chosen by
Fabio Sabatini
University of Siena

  1. Inequality and Network Structure By Iyengar, G.; Kets, W.; Sethi, R.; Bowles, S.
  2. Social Connections and Incentives in the Workplace: Evidence from Personnel Data By Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
  3. Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities By Alberto Chong; Hugo Nopo; Vanessa Rios
  4. Who Makes a Good Leader? Social Preferences and Leading-by-Example By Gächter, Simon; Nosenzo, Daniele; Renner, Elke; Sefton, Martin
  5. Social Norms and Individual Savings in the Context of Informal Insurance By Zaki Wahhaj
  6. On Genocide, Economic Reasons vs. Ethnic Passion By Damien Bazin; Jerome Ballet; Francois-Regis Mahieu
  7. Survey Evidence on Conditional Norm Enforcement By Traxler, Christian; Winter, Joachim
  8. A model of influence in a social network. By Michel Grabisch; Agnieszka Rusinowska
  9. Trust In Fairtrade: The 'Feel-Good' Effect By Brigitte Granville
  10. Green goods: are they good or bad news for the environment? Evidence from a laboratory experiment on impure public goods By Munro, Alistair; Valente, Marieta
  11. I Don't Want to Hear About it: Ration Ignorance among Duty-Oriented Consumers By Nyborg, Karine
  12. Applying Relation Algebra and RelView to Measures in a Social Network By Rudolf Berghammer; Agnieszka Rusinowska; Harrie de Swart
  13. International Migration, Transfers of Norms and Home Country Fertility By Beine, Michel; Docquier, Frédéric; Schiff, Maurice
  14. Cooperation in Dividing the Cake By Dall'Aglio, M.; Brânzei, R.; Tijs, S.H.

  1. By: Iyengar, G.; Kets, W.; Sethi, R.; Bowles, S. (Tilburg University, Center for Economic Research)
    Abstract: This paper explores the manner in which the structure of a social network constrains the level of inequality that can be sustained among its members. We assume that any distribution of value across the network must be stable with respect to coalitional deviations, and that players can form a deviating coalition only if they constitute a clique in the network. We show that if the network is bipartite, there is a unique stable payoff distribution that is maximally unequal in that it does not Lorenz dominate any other stable distribution. We obtain a complete ordering of the class of bipartite networks and show that those with larger maximum independent sets can sustain greater levels of inequality. The intuition behind this result is that networks with larger maximum independent sets are more sparse and hence offer fewer opportunities for coalitional deviations. We also demonstrate that standard centrality measures do not consistently predict inequality. We extend our framework by allowing a group of players to deviate if they are all within distance k of each other, and show that the ranking of networks by the extent of extremal inequality is not invariant in k.
    Keywords: inequality;networks;coalitional deviations;power;centrality.
    JEL: C71 D30 D85
    Date: 2008
  2. By: Bandiera, Oriana (London School of Economics); Barankay, Iwan (University of Pennsylvania); Rasul, Imran (University College London)
    Abstract: We present evidence on the effect of social connections between workers and managers on productivity in the workplace. To evaluate whether the existence of social connections is beneficial to the firm's overall performance, we explore how the effects of social connections vary with the strength of managerial incentives and worker's ability. To do so, we combine panel data on individual worker's productivity from personnel records with a natural field experiment in which we engineered an exogenous change in managerial incentives, from fixed wages, to bonuses based on the average productivity of the workers managed. We find that when managers are paid fixed wages, they favor workers to whom they are socially connected irrespective of the worker's ability, but when they are paid performance bonuses, they target their effort towards high ability workers irrespective of whether they are socially connected to them or not. Although social connections increase the performance of connected workers, we find that favoring connected workers is detrimental for the firm's overall performance.
    Keywords: natural field experiment, managerial incentives, favoritism
    JEL: J33 M52 M54
    Date: 2008–12
  3. By: Alberto Chong; Hugo Nopo; Vanessa Rios
    Abstract: This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.
    Keywords: Experiments, Surveys, Social Programs, Trust, Stigma, Latin America
    JEL: D01 O12 O10
    Date: 2009–01
  4. By: Gächter, Simon (University of Nottingham); Nosenzo, Daniele (University of Nottingham); Renner, Elke (University of Nottingham); Sefton, Martin (University of Nottingham)
    Abstract: We examine the effects of social preferences and beliefs about the social preferences of others in a simple leader-follower voluntary contributions game. We find that groups perform best when led by those who are reciprocally oriented. Part of the effect can be explained by a false consensus effect: selfish players tend to think it more likely that they are matched with another selfish player and reciprocators tend to think it more likely that they are matched with another reciprocator. Thus, reciprocators contribute more as leaders partly because they are more optimistic than selfish players about the reciprocal responses of followers. However, even after controlling for beliefs we find that reciprocally-oriented leaders contribute more than selfish leaders. Thus, we conclude that differing leader contributions by differing types of leader must in large part reflect social motivations.
    Keywords: reciprocity, contribution preferences, leadership, leading-by-example, false consensus effect
    JEL: A13 C92
    Date: 2008–12
  5. By: Zaki Wahhaj
    Abstract: This paper develops a theory of informal insurance in the presence of an intertemporal technology. It is shown that when an insurance agreement suffers from enforcement problems, constraints on individual savings behaviour can enable the group to sustain greater cooperation. This result provides a motivation for a variety of social norms observed in traditional societies which discourage 'excessive' accumulation of wealth by individuals. The paper also shows that social norms that discourage savings are more likely to benefit poorer communities and thus, paradoxically, cause them to fall further behind even as it serves a useful purpose.
    Date: 2008–10
  6. By: Damien Bazin (University of Nice Sophia Antipolis, France); Jerome Ballet (University of Versailles Saint-Quentin-en-Yvelines (UVSQ) Center of Ethics and Economics for Environment and Development (C3ED), France); Francois-Regis Mahieu (University of Versailles Saint-Quentin-en-Yvelines (UVSQ) Center of Ethics and Economics for Environment and Development (C3ED), France)
    Abstract: The traditional vision of genocide is exogenous. In this framework, ethnies have a real sense. The economic approach of conflicts has expressed slight differences in the relation between ethnies and conflicts. However it does not reject this explanation. Here we propose an alternative approach, an endogenous vision of genocide. Genocide appears in society where social capital plays a major role in solidarities. But social capital is a weak asset in the individual portfolio. Economic and social shocks may have impacts on the assets structure and may produce conflicts such as genocide. In this new framework, policy makers may have to adopt prudential rules.
    Keywords: Conflicts, Ethnocide, Genocide, Policies implications, Social capital
    JEL: F00 Z13
    Date: 2008–06
  7. By: Traxler, Christian; Winter, Joachim
    Abstract: We discuss survey evidence on individuals' willingness to sanction norm violations - such as evading taxes, drunk driving, fare dodging, or skiving o work - by expressing disapproval or social exclusion. Our data suggest that people condition their sanctioning behavior on their belief about the frequency of norm violations. The more commonly a norm violation is believed to occur, the lower the individuals' inclination to punish it. Based on an instrumental variable approach, we demonstrate that this pattern reflects a causal relationship.
    Keywords: Norm Enforcement; Sanctioning; Social Norms; Survey Evidence
    JEL: K42 Z13 D1
    Date: 2009–01–21
  8. By: Michel Grabisch (Centre d'Economie de la Sorbonne); Agnieszka Rusinowska (GATE)
    Abstract: In the paper, we study a model of influence in a social network. It is assumed that each player has an inclination to say YES or NO which, due to influence of other players, may be different from the decision of the player. The point of departure here is the concept of the Hoede-Bakker index - the notion which computes the overall decisional "power" of a player in a social network. The main drawback of the Hoede-Bakker index is that it hides the actual role of the influence function, analyzing only the final decision in terms of success and failure. In this paper, we separate the influence part from the group decision part, and focus on the description and analysis of the influence part. We propose among other descriptive tools a definition of a (weighted) influence index of a coalition upon an individual. Moreover, we consider different influence functions representative of commonly encountered situations. Finally, we propose a suitable definition of a modified decisional power.
    Keywords: Influence function, influence index, decisional power, social network.
    JEL: C7 D7
    Date: 2008–12
  9. By: Brigitte Granville
    Abstract: Fairtrade is nurtured with stories aimed at making consumers feel good by buying Fairtrade products. This ‘feel-good’ factor may vary when it is found that, the proportional division of the benefits between producer and other potential gainers is biased towards the distributors. There is, therefore, an incentive to verify whether the trust accorded to Fairtrade is justified. If trust and therefore the feel-good factor are undermined or enhanced as a result of the validation of the stories, then the whole Fairtrade movement could potentially crumble or burgeon. Drawing on elements in Glaeser (2005)’s model, this paper analyses the factors behind the recent expansion of Fairtrade.
    Keywords: Fairtrade
    Date: 2009–01
  10. By: Munro, Alistair; Valente, Marieta
    Abstract: An impure public good is a commodity that combines public and private characteristics in fixed proportions. Green goods such as dolphin-friendly tuna or green electricity programs provide increasings popular examples of impure goods. We design an experiment to test how the presence of impure public goods affects pro-social behaviour. We set parameters, such that from a theoretical point of view the presence of the impure public good is behaviorally irrelevant. In a baseline setting, where the impure public good provides only small contributions to the public good. We observe that on aggregate pro-social behaviour, defined as total contributions to the public good, is lower in the presence of the impure good. Some individuals do not alter their decisions, but roughly two fifths of subjects make a lower contribution to the public good in the presence of the impure public good. On the contrary, in the case where the impure public good favours the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We conclude that the presence of green goods which have only a small environmental component may reduce pro-environmental behaviour.
    Keywords: green goods; impure public goods; pro-social behaviour; social norms; experimental economics
    JEL: Q50 H41 D64 C91
    Date: 2008–10–30
  11. By: Nyborg, Karine (Dept. of Economics, University of Oslo)
    Abstract: Individuals with a preference for keeping moral obligations may dislike learning that voluntary contributions are socially valuable: Such informa- tion can trigger unpleasant feelings of cognitive dissonance. I show that if initial beliefs about the social value of contributions are sufficiently low, duty-oriented consumers are willing to pay to avoid information. Attitude campaigns can increase contributions from such consumers by providing them with unwanted information. Consequentialist warm glow types with low initial beliefs, however, will seek low-cost information on their own initiative; thus, campaigns will have less effects for such consumers.
    Keywords: Voluntary contributions: public goods; responsibility; altruism; information campaigns; cognitive dissonance
    JEL: D11 D62 D64 D89 H41 Q21
    Date: 2008–07–10
  12. By: Rudolf Berghammer (Institut f¨ur Informatik Christian-Albrechts-Universität Kiel, Germany); Agnieszka Rusinowska (University of Lyon, Lyon, F-69003, France; CNRS, UMR 5824, GATE, Ecully, F-69130, France; ENS LSH, Lyon, F-69007, France ; Centre Leon Berard, Lyon, F-69003, France; Department of Econometrics and Tinbergen Institute, Free University, The Netherlands); Harrie de Swart (Department of Philosophy, Tilburg University, The Netherlands)
    Abstract: We present an application of relation algebra to measure players’ ‘strength’ in a social network with influence between players. In particular, we deal with power, success, and influence of a player as measured by the Hoede-Bakker index, its generalization and modifications, and by the influence indices. We also apply relation algebra to determine followers of a coalition and the kernel of an influence function. This leads to specifications, which can be executed with the help of the BDDbased tool RelView after a simple translation into the tool’s programming language. As an example we consider the present Dutch parliament.
    Keywords: RelView, relation algebra, social network, the Hoede-Bakker index, influence index, follower, kernel
    JEL: C63 C88 D72 D85
    Date: 2009
  13. By: Beine, Michel (University of Luxembourg); Docquier, Frédéric (Catholic University of Louvain); Schiff, Maurice (World Bank)
    Abstract: This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries' fertility norms and an incentive to acquire more education. We provide a rigorous test of the diffusion of fertility norms using original and detailed data on migration. Our results provide evidence of a strong transfer of fertility norms from migrants to their country of origin.
    Keywords: international migration, endogenous fertility, human capital, social norms
    JEL: J13 J61 O11
    Date: 2008–12
  14. By: Dall'Aglio, M.; Brânzei, R.; Tijs, S.H. (Tilburg University, Center for Economic Research)
    Abstract: This paper defines models of cooperation among players partition- ing a completely divisible good (such as a cake or a piece of land). The novelty of our approach lies in the players' ability to form coalitions before the actual division of the good with the aim to maximize the average utility of the coalition. A social welfare function which takes into account coalitions drives the division. In addition, we derive a cooperative game which measures the performance of each coalition. This game is compared with the game in which players start cooper- ating only after the good has been portioned and has been allocated among the players. We show that a modified version of the game played before the division outperforms the game played after the di- vision.
    Keywords: fair division;cooperative games;maximin partition
    JEL: C71 D61
    Date: 2008
  15. By: Mohamed Belhaj (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579, ECM - Ecole Centrale de Marseille - Ecole Centrale de Marseille); Frédéric Deroïan (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579)
    Abstract: This article explores individual incentives to produce information on communication networks. In our setting, efforts are strategic complements along communication paths with possible decay. We analyze Nash equilibria on the line network. We give conditions under which more central agents provide more efforts for general payofffunctions, and we fully characterize equilibria under geometric decay.
    Keywords: Communication Network, Endogenous Efforts, Strategic Complements
    Date: 2009–01–16

This nep-soc issue is ©2009 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.