nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒03‒28
eight papers chosen by
Fabio Sabatini
University of Siena

  1. Measuring Trust : Experiments and Surveys in Contrast and Combination By Michael Naef; Jürgen Schupp
  2. Intermarriage and Immigrant Employment: The Role of Networks By Delia Furtado; Nikolaos Theodoropoulos
  3. Shedding Light into Preference Heterogeneity: Why Players of Traveller’s Dilemma Depart from Individual Rationality? By Leonardo Becchetti; Giacomo Degli Antoni; Marco Faillo
  4. Individual Heterogeneity, Group Interaction, and Co-operative Behaviour: Evidence from a Common-Pool Resource Experiment in South Africa and Namibia By Bernd Hayo; Björn Vollan
  5. Reciprocity and Competition: Is There a Connection? By Jonathan C. Rork; Gary A. Wagner
  6. Can intentions spoil the kindness of a gift? - An experimental study By Strassmair, Christina
  7. Pricing in networks By Francis Bloch; Nicolas Quérou
  8. Accommodating Indigenous Cultural Values in Water Resource Management: The Waikato River, New Zealand; the Murray- Darling Basin, Australia; and the Colorado River, USA By Steenstra, Alex

  1. By: Michael Naef; Jürgen Schupp
    Abstract: Trust is a concept that has attracted - significant attention in economic theory and research within the last two decades: it has been applied in a number of contexts and has been investigated both as an explanatory and as a dependent variable. In this paper, we explore the questions of what exactly is measured by the diverse survey-derived scales and experiments claiming to measure trust, and how these different measures are related. Using nationally representative data, we test a commonly used experimental measure of trust for robustness to a number of interferences, finding it to be mostly unsusceptible to stake size, the extent of strategy space, the use of the strategy method, and the characteristics of the experimenters. Inspired by criticism of the widespread trust question used in many surveys, we created a new, improved survey trust scale consisting of three short statements. We show that the dimension of this scale is distinct from trust in institutions and trust in known others. Our new scale is a valid and reliable measure of trust in strangers. The scale is valid in the sense that it correlates with trusting behaviour in the experiment. Furthermore, we demonstrate that the test-retest reliability of six weeks is high. The experimental measure of trust is, on the other hand, not significantly correlated with trust in institutions nor with trust in known others. We therefore conclude that the experimental measure of trust refers not to trust in a general sense, but specifically to trust in strangers.
    Keywords: Trust, experiment, survey, representativity, SOEP
    JEL: C91 D63 Z13
    Date: 2009
  2. By: Delia Furtado (University of Connecticut and Institute for the Study of Labor (IZA)); Nikolaos Theodoropoulos (University of Cyprus and Centre for Research and Analysis of Migration (CReAM, UCL))
    Abstract: The social integration of immigrants is believed to be an important determinant of immigrants’ labor market outcomes. Using 2000 U.S. Census data, we examine how and why marriage to a native, one measure of social assimilation, affects immigrant employment rates. We show that even when controlling for a variety of human capital and assimilation measures, marriage to a native increases the probability that an immigrant is employed. An instrumental variables approach which exploits variation in marriage market conditions suggests that the relationship between marriage decisions and employment rates is not likely to arise from positive selection into marrying a native. We then present several pieces of evidence suggesting that networks obtained through marriage play an important part in explaining this effect.
    Date: 2009–01
  3. By: Leonardo Becchetti (University of Rome Tor Vergata); Giacomo Degli Antoni (EconomEtica); Marco Faillo (University of Trento - Faculty of Economics)
    Abstract: We analyse the experimental outcome of the Traveller's Dilemma under three different treatments - baseline (BT), compulsory ex post players' meeting (CET) and voluntary ex post players' meeting (VET) - to evaluate the effects of removal of anonymity (without preplay communication) in a typical one shot game in which there is a dilemma between individual rationality and aggregate outcome. We show that deviations from the Nash equilibrium outcome are compatible with the joint presence in the sample of individually rational, team-rational, (gift giving), "irrational" and (opportunistic) "one-shot-cooperator" types. The two main factors affecting deviations from the standard individually rational behaviour are male gender and the interaction of generalised trust with the decision of meeting the counterpart in the VET design.
    Keywords: Traveller’s Dilemma, Team Preferences, Social Distance, Generalised Trust, Relational Goods
    JEL: C72 C91 A13
    Date: 2009–03
  4. By: Bernd Hayo (Philipps-University Marburg, Faculty of Business Administration & Economics, Universitaetsstr. 24, D-35037 Marburg, Germany); Björn Vollan (University of Mannheim, Department of Economics, L7, 3-5, D-68131 Mannheim, Germany)
    Abstract: We present econometric evidence on the influence of an individual’s sociodemographic characteristics, economic background, and dynamic personal and group interactions on co-operative behaviour in a social dilemma situation. The data are from a framed common-pool resource experiment conducted in Namibian and South African farming communities. Our paper helps to better understand the discrepancy between the fact that people seem to care about advancing their relative position in real life but tend to act to reduce inequality in a laboratory setting. We analyse the first move in the game, the cumulated amount of resources gained by the players and, by taking into account the temporal dimension of the game in a panel context, each individual move.
    Keywords: Common-pool resources, field experiment, group interaction, relative income position, Southern Africa
    JEL: Q24
    Date: 2009
  5. By: Jonathan C. Rork (Andrew Young School of Policy Studies - Georgia State University); Gary A. Wagner (University of Arkansas at Little Rock)
    Abstract: One challenge states face in designing an income tax system is deciding how to treat non-resident earners. Numerous states have entered into reciprocity agreements with other states that exclude non-residents’ income from the tax base. These agreements provide a unique opportunity to explore the nature of state tax competition. We demonstrate that not only do reciprocity agreements dampen competition over income taxes, but the states that enact agreements also exhibit decreased levels of competition over other tax bases. This suggests that reciprocity agreements are a credible vehicle for states to act cooperatively and avoid a potential race to the bottom.
    Keywords: Spatial econometrics, interjurisdictional competition, state taxation, reciprocity.
    JEL: H7 R5
    Date: 2009
  6. By: Strassmair, Christina
    Abstract: Consider a situation where person A undertakes a costly action that benefits person B. This behavior seems altruistic. However, if A expects a reward in return from B, then A's action may be motivated by the expected rewards rather than by pure altruism. The question we address in this experimental study is how B reacts to the intentions of A. We vary the probability, with which the second mover in a trust game can reciprocate, and analyze effects on second mover behavior. Our results suggest that the perceived kindness and its rewards are not spoiled by expected rewards.
    Keywords: social preferences; intentions; beliefs; psychological game theory; experiment
    JEL: D02 C91 D64
    Date: 2009–03–20
  7. By: Francis Bloch (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Nicolas Quérou (School of Management and Economics - Queen's University of Belfast)
    Abstract: This paper studies optimal pricing in networks in the presence of local consumption or price externalities. It analyzes the relation between prices and nodal centrality measures. Using an asymptotic approach, it shows that the ranking of optimal prices and strategies can be reduced to the lexicographic ranking of a specific vector of nodal characteristics. In particular, this result shows that with positive consumption externalities, prices are higher at nodes with higher degree, and with relative price externalities, prices are higher at nodes which have more neighbors of smaller degree.
    Keywords: Social Networks, Network Externalities, Oligopolies
    Date: 2008–10
  8. By: Steenstra, Alex
    Abstract: This paper examines how cultural values are accommodated in natural resource management and compares and contrast the approaches used in the Waikato River in New Zealand, the Murray-Darling Basin in Australia, and the Colorado River in the USA. Economics plays an integral part in the management of rivers in these case studies and two distinct approaches are used; privatization and co-management. The paper reviews these approaches and proffers suggestions on how indigenous knowledge, cultural and social relationships, and social, cultural, and economic wellbeing may be integrated in a multi-cultural approach.
    Date: 2009

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.