nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒02‒28
fifteen papers chosen by
Fabio Sabatini
University of Siena

  1. Long Term Persistence By Guiso, Luigi; Sapienza, Paola; Zingales, Luigi
  2. Peer Effects and Social Networks in Education By Calvó-Armengol, Antoni; Patacchini, Eleonora; Zenou, Yves
  3. People I Know: Job Search and Social Networks By Cingano, Federico; Rosolia, Alfonso
  4. The 60es turnaround as a test on the causal relationship between sociability and happiness By Leonardo Becchetti; Elena Giachin Ricca; Alessandra Pelloni
  5. Social Connections and Incentives in the Workplace: Evidence from Personnel Data By Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
  6. Social Interactions, Ethnicity and Fertility in Kenya By Iyer, S.; Weeks, M.
  7. Volunteering and the State By Hackl, Franz; Halla, Martin; Pruckner, Gerald J.
  8. Redistribution and the Notion of Social Status By Ennio Bilancini; Leonardo Boncinelli
  9. The Italian Corporate Network, 1952-1983: New Evidence Using the Interlocking Directorates Technique By Alberto Rinaldi; Michelangelo Vasta
  10. On the Nature, Modeling, and Neural Bases of Social Ties By Ridderinkhof, Richard; Stallen, Mirre; van Winden, Frans A.A.M.
  11. The Current State of Research on Networks in China’s Business System By Meuer, J.; Krug, B.
  12. To Work or Not? Simulating Inspection Game with Labor Unions By Steinbacher, Matej; Steinbacher, Matjaz; Steinbacher, Mitja
  13. Club Networks with Multiple Memberships and Noncooperative Stability By Frank H. Page, Jr., Myrna H. Wooders
  14. Motivation and Sorting in Open Source Software Innovation By Belenzon, Sharon; Schankerman, Mark
  15. Economic and Social Factors Driving the Third Wave of Democratization By Papaioannou, Elias; Siourounis, Gregorios

  1. By: Guiso, Luigi; Sapienza, Paola; Zingales, Luigi
    Abstract: Is social capital long lasting? Does it affect long term economic performance? To answer these questions we test Putnam’s conjecture that today marked differences in social capital between the North and South of Italy were due to the culture of independence fostered by the free city-states experience in the North of Italy at the turn of the first millennium. We show that the medieval experience of independence has an impact on social capital within the North, even when we instrument for the probability of becoming a city-state with historical factors (such as the Etruscan origin of the city and the presence of a bishop in year 1,000). More importantly, we show that the difference in social capital among towns that in the Middle Ages had the characteristics to become independent and towns that did not exists only in the North (where most of these towns became independent) and not in the South (where the power of the Norman kingdom prevented them from doing so). Our difference in difference estimates suggest that at least 50% of the North-South gap in social capital is due to the lack of a free city-state experience in the South.
    Keywords: culture; economic development; institutions; persistence; social capital
    JEL: O10 O43 P16
    Date: 2008–10
  2. By: Calvó-Armengol, Antoni; Patacchini, Eleonora; Zenou, Yves
    Abstract: This paper studies whether structural properties of friendship networks affect individual outcomes in education. We first develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to her Katz-Bonacich centrality measure. This measure takes into account both direct and indirect friends of each individual but puts less weight to her distant friends. We then bring the model to the data by using a very detailed dataset of adolescent friendship networks. We show that, after controlling for observable individual characteristics and unobservable network specific factors, the individual's position in a network (as measured by her Katz-Bonacich centrality) is a key determinant of her level of activity. A standard deviation increase in the Katz-Bonacich centrality increases the pupil school performance by more than 7 percent of one standard deviation.
    Keywords: centrality measure; network structure; peer influence; school performance
    JEL: A14 C31 C72
    Date: 2008–11
  3. By: Cingano, Federico; Rosolia, Alfonso
    Abstract: We assess the information spillovers generated by the exchange of job-related information within networks of fellow workers exploiting administrative records covering all employment relationships established in a specific local labor market over 20 years. We recover individual-specific networks of former colleagues for a sample of workers exogenously displaced by firm closures and relate their subsequent unemployment duration to the share of employed contacts at displacement date. Individual-specific networks and the longitudinal dimension of the data allow to account for most plausible sources of omitted variable bias. In particular, identification rests on within-closure within-neighborhood and within-skill comparisons conditional of a wide range of predictors for the displaced and his contacts' employment status, such as lagged wages and labor market attachment. We find that contacts' current employment rate has statistically significant effects on unemployment duration: a one standard deviation increase in the network employment rate reduces unemployment duration by about 8 percent; as a benchmark, a one standard deviation increase in own wage at displacement is associated with a 10 percent lower unemployment duration. These effects are magnified if contacts recently searched for a job and if their current employer is closer, both in space and in skills requirements, to the displaced. We find that stronger ties and lower competition for the available information also speed up re-employment. A number of specification checks and indirect tests suggests the estimated spillover effect of contacts' current employment status is driven by information exchange rather than by other interaction mechanisms.
    Keywords: job search; social networks; spillover effects
    JEL: D0 J0
    Date: 2008–08
  4. By: Leonardo Becchetti (University of Rome Tor Vergata); Elena Giachin Ricca (University of Rome Tor Vergata); Alessandra Pelloni (University of Rome Tor Vergata)
    Abstract: The nexus between relational life and life satisfaction is riddled with endogeneity problems. By investigating the causal relationship going from the first to the second variable we consider that retirement is a shock which increases the time investable in (outside job) relational life. As a consequence we instrument investment in relational goods with the aggregate exogenous age-retirement pattern. With such approach we document that investment in relational life has a positive and significant effect on life satisfaction. Consequences of our findings in terms of retirement effects and age-happiness pattern are also discussed.
    Keywords: life satisfaction, relational goods, social capital
    JEL: I30 D61 A11 A13
    Date: 2009–02
  5. By: Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
    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: favoritism; managerial incentives; natural field experiments
    JEL: J33 M52 M55
    Date: 2009–01
  6. By: Iyer, S.; Weeks, M.
    Abstract: This paper examines, theoretically and empirically, the impact of reproductive externalities on fertility behaviour in Kenya. We examine this issue by identifying structural forms of social interaction operating across individuals belonging to different ethnic groups on the number of children ever born. We use the 1998 Demographic and Health Survey, and meteorological data on Kenya, to examine whether social interactions effects are important over and above an individual's characteristics in order to explain variations in fertility. In so doing, we conclude that social interactions are very important for the fertility behaviour of different ethnic groups in Kenya.
    Date: 2009–01
  7. By: Hackl, Franz (University of Linz); Halla, Martin (University of Linz); Pruckner, Gerald J. (University of Linz)
    Abstract: This paper explores the capability of the state to affect the individual's decision to work for free. For this purpose we combine individual-level data from the European and World Values Survey with macroeconomic and political variables for OECD member countries. Empirically we identify three channels for crowding out of voluntary labor. Firstly, an increase in public social expenditure decreases the probability that the individual will volunteer (fiscal crowding out). Secondly, a political consensus between individuals and the government also induces volunteers to reduce their unsalaried activities (consensual crowding out). And finally, the more a government supports democratization, the lower is the individual's engagement (participatory crowding out). Religiosity and a more unequal income distribution in a country increase individuals’ willingness to volunteer.
    Keywords: volunteering, voluntary labor supply, private provision of public goods, public social expenditure, political consensus, democratization
    JEL: H41 H44 H31 J22 I38 H11 D30 D64
    Date: 2009–02
  8. By: Ennio Bilancini; Leonardo Boncinelli
    Abstract: In this paper we study the impact of redistributive policies when agents can signal their relative standing by spending on a conspicuous good. In particular, we analyze how the shape of the status function (i.e. how relative standing is computed and evaluated) may affect the equilibrium outcome of the model. Our main nding is that, if status depends in a cardinal way on individuals' relative standing, then a redistribution from the rich to the poor can be Pareto improving. We identify a necessary and sucient condition for the latter case.
    Keywords: social status, relative standing, consumption externalities, redistribution, signalling, conspicuous consumption, income inequality
    JEL: D11 D31 D62
    Date: 2008–12
  9. By: Alberto Rinaldi; Michelangelo Vasta
    Abstract: The paper explores the structure of the Italian corporate network by focusing on the relationships between financial - banks, insurances and holdings - and industrial firms in Italy during the period 1952-83 through the analysis of the interlocks that existed between them. By an interlock is meant the link created between two firms when an induvidual belongs to the board of directors of both. The analysis is based on a database - Imita.db - containing data on over 130,000 directors of Italian joint stock companies for the years 1952, 1960, 1972 and 1983. After showing a descriptive statistics of the companies and the directors included in the database, the paper develops a network connectivity analysis of the system. This is integrated by a prosopographic study about the big linkers, defined as those directors cumulating the highest number of offices in each benchmark year. The paper confirms that the Italian corporate network maintained substantial peculiarities in the period investigated. In particular, it argues that interlocks played an important role in guaranteeing the stability of the positions of control of the major private companies and their connections with State-owned enterprises. In 1952 and 1960, the system, centred on the larger electrical companies, showed the highest degree of cohesion. That centre dissolved after the nationalisation of the electricity industry in 1962 and was replaced by a less strong and cohesive one, hinged on banks, insurances and the major finance companies. At the beginning of the 1980s the centre appeared to have been further reshaped with the marginalisation of state-owned enterprises.
    Keywords: Italy; Corporate Network; Interlocking directorates; Network Analysis; Big Linkers; Private and State-owned Enterprises
    JEL: N24 P12 C63
    Date: 2008–10
  10. By: Ridderinkhof, Richard; Stallen, Mirre; van Winden, Frans A.A.M.
    Abstract: This paper addresses the nature, formalization, and neural bases of (affective) social ties and discusses the relevance of ties for health economics. A social tie is defined as an affective weight attached by an individual to the well-being of another individual (‘utility interdependence’). Ties can be positive or negative, and symmetric or asymmetric between individuals. Characteristic of a social tie, as conceived of here, is that it develops over time under the influence of interaction, in contrast with a trait like altruism. Moreover, a tie is not related to strategic behavior such as reputation formation but seen as generated by affective responses. A formalization is presented together with some supportive evidence from behavioral experiments. This is followed by a discussion of related psychological constructs and the presentation of suggestive neural findings, based on the existing literature. We conclude with some suggestions for future research.
    Keywords: Affect; Modeling; Neuroeconomics; Social Ties
    JEL: D01 D64 D87 H41 I10
    Date: 2008–08
  11. By: Meuer, J.; Krug, B. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: The purpose of the paper is to assess the current state of network research in China’s business system. Research on networks has developed significantly during the last decades in regards to analytic techniques, number of research projects, and accumulated findings. While research on networks in China has always received much attention – not least because networks are (still) considered one of the major forces behind the country’s socio-economic change – this development has also had an effect on how research on generic networks in China is being conducted. How Chinese networks are modelled, which aspects remain controversial in the academic debate, and which conclusions the different studies offer asks for a systematic comparison. The paper, based on an extensive literature research, therefore relies on a framework of theoretical concepts underlying the study of networks which allows a categorization of the dominant (generic) forms of Chinese networks as discussed in major journals. The study on the one hand is descriptive by filtering the diverse literature of network research on China’s business system. On the other hand, it serves to identify gaps and shortcomings of the current literature in this field pointing to future research directions. We identify four generic types of networks, Chinese business groups (qiyejituan), Overseas Chinese Communities, networks of social relations (guanxi), and Network Capitalism, as an alternative economic model. As the study shows, the research approaches to these networks are extremely diverse both in description and analysis. A focus on the identified gaps within each type of network and a convergence between the types of networks should yield to further insights into the study of networks as well as their implications for economic systems.
    Keywords: China;organizational networks;social networks
    Date: 2009–02–18
  12. By: Steinbacher, Matej; Steinbacher, Matjaz; Steinbacher, Mitja
    Abstract: The model of social network is used to analyze the impact of the power of labor unions in the labor relations. We find that labor union capable to affect a pecuniary compensation of shirking employees lessens the motivation of employees to work and improve to the unionization rate. As a result, the performance of the firm is significantly deteriorated and its existence endangered. On the other hand, the inspection proved to be a successful method for “motivating” employees to work. By using non-omniscient agents, we also estimated the cost of that non-omniscience, which proved to be significant in all cases.
    Keywords: social networks; inspection game; evolutionary games
    JEL: D21 J51 Z13 C73
    Date: 2009–02
  13. By: Frank H. Page, Jr., Myrna H. Wooders (Indiana University Bloomington Vanderbilt University)
    Abstract: Modeling club structures as bipartite directed networks, we formulate the problem of club formation as a noncooperative game of network formation and identify conditions on network formation rules and players’ network payoffs sufficient to guarantee that the game has a potential function. Our sufficient conditions on network formation rules require that each player be choose freely and unilaterally those clubs he joins and also his activities within these clubs (subject to his set of feasible actions). We refer to our conditions on rules as noncooperative free mobility. We also require that players’ payoffs be additively separable in player-specific payoffs and externalities (additive separability) and that payoff externalities — a function of club membership, club activities, and crowding — be identical across players (externality homogeneity). We then show that under these conditions, the noncooperative game of club network formation is a potential game over directed club networks and we discuss the implications of this result.
    Date: 2009–02
  14. By: Belenzon, Sharon; Schankerman, Mark
    Abstract: This paper studies the role of intrinsic motivation, reputation and reciprocity in driving open source software innovation. We exploit the observed pattern of contributions - the 'revealed preference' of developers - to infer the underlying incentives. Using detailed information on code contributions and project membership, we classify developers into distinct groups and study how contributions from each developer type vary by license (contract) type and other project characteristics. The central empirical finding is that developers strongly sort by license type, project size and corporate sponsorship. This evidence confirms the importance of heterogeneous motivations, specifically a key role for motivated agents and reputation, but less for reciprocity.
    Keywords: incentives; innovation; intrinsic motivation; motivated agents; open source software; reciprocity; reputation
    JEL: L14 L17 L41 O31 O32
    Date: 2008–10
  15. By: Papaioannou, Elias; Siourounis, Gregorios
    Abstract: We identify permanent democratic transitions during the Third Wave of Democratization and the nineties, when many former socialist countries moved towards representative rule. Using political freedom indicators, electoral archives, and historical resources in 174 countries in the period 1960-2005, we identify 63 democratic transitions, 3 reverse transitions from relatively stable democracy to autocracy and 6 episodes of small improvements in representative institutions. We also classify non-reforming countries to stable autocracies and always democratic. We then use the dataset to test theories on the prerequisites for democracy in these countries that enter the Third Wave as non-democracies. Examining initially autocratic countries enables us to address issues of sample selection (in the beginning of the sample most developed countries were already democratic) and reverse causality (democracy can be both a cause and a consequence of wealth, for example). Our estimates reveal that democratization is more likely to emerge in affluent and especially educated societies. Economic development and education are also key factors determining the intensity of democratic reforms and how quickly democratic transitions will occur. These results appear robust to controls like the social environment (religion and fractionalization), natural resources, trade openness and proxies of early institutions.
    Keywords: democratization; institutions; political development
    JEL: O10 P16
    Date: 2008–10

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.
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