nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒06‒03
seventeen papers chosen by
Fabio Sabatini
University of Siena

  1. Social Incentives in the Workplace By Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
  2. An exploratory study of associations between social capital and selfassessed health in Norway By Iversen, Tor
  3. Genetic Variability and Collective Social Norms: The Case of Binge Drinking By Shogren, Jason F.; Nævdal, Eric
  4. Matching and network effects By Marcel Fafchamps; Marco van der Leij; Sanjeev Goyal
  5. Networks and innovation: the role of social assets in explaining firms' innovative capacity By Uwe Cantner; Elisa Conti; Andreas Meder
  6. Migrants at School: Educational Inequality and Social Interaction in the UK and Germany By Entorf, Horst; Tatsi, Eirini
  7. Incentivising trust By Pamela Lenton; Paul Mosley
  8. Patience or Fairness? Analyzing Social Preferences in Repeated Games By John Duffy; Felix Munoz-Garcia
  9. The Impact of Institutions, Culture, and Religion on Per Capita Income By Constanze Dobler
  10. The Random Part in Network Evolution By Thomas Grebel
  11. Ethnic Networks, Information, and International Trade: Revisiting the Evidence By Gabriel Felbermayr; Benjamin Jung; Farid Toubal
  12. Rewards and Punishments in Bargaining By Svetlana Pevnitskaya; Dmitry Ryvkin
  13. Life Satisfaction among Rural Low-income Mothers: The Influence of Health, Human, Personal, and Social Capital By Sheila Mammen; Jean W. Bauer; Daniel Lass
  14. Accomplice-Witnesses, Organized Crime and Corruption: Theory and Evidence from Italy By Antonio Acconcia; Giovanni Immordino; Salvatore Piccolo; Patrick Rey
  15. Intrapreneurship or Entrepreneurship? By Parker, Simon C.
  16. On Growth and Development. By Mina Baliamoune-Lutz
  17. Behavioral Assumptions and Management Ability: A Tentative Test By Benito Arruñada; Xosé H. Vázquez

  1. By: Bandiera, Oriana (London School of Economics); Barankay, Iwan (University of Pennsylvania); Rasul, Imran (University College London)
    Abstract: We present evidence on social incentives in the workplace, namely on whether workers’ behavior is affected by the presence of those they are socially tied to, even in settings where there are no externalities among workers due to either the production technology or the compensation scheme in place. To do so we combine data on individual worker productivity from a firm’s personnel records with information on each worker’s social network of friends in the firm. We find that compared to when she has no social ties with her co-workers, a given worker’s productivity is significantly higher when she works alongside friends who are more able than her, and significantly lower when she works with friends who are less able than her. As workers are paid piece rates based on individual productivity, social incentives can be quantified in monetary terms and are such that (i) workers who are more able than their friends are willing to exert less effort and forgo 10% of their earnings; (ii) workers who have at least one friend who is more able than themselves are willing to increase their effort and hence productivity by 10%. The distribution of worker ability is such that the net effect of social incentives on the firm’s aggregate performance is positive. The results suggest that firms can exploit social incentives as an alternative to monetary incentives to motivate workers.
    Keywords: conformism, social incentives, social networks
    JEL: L2 M5
    Date: 2009–05
  2. By: Iversen, Tor (Institute of Health Management and Health Economics)
    Abstract: The objective of this study is to estimate associations between social capital and health when other factors are controlled for. Data from the survey of level-of-living conditions by Statistics Norway are merged with data from several other sources. The merged files combine data at the individual level with data that describe indicators of community-level social capital related to each person’s county of residence. Both cross-sectional and panel data are used. We find that one indicator of community-level social capital — voting participation in local elections — was positively associated with self-assessed health in the cross-sectional study and in the panel data study. While we find that religious activity at the community-level has a positive effect in the cross-sectional survey and a non-significant effect in the panel survey, we find that sports organizations have a negative effect on health in the cross-sectional survey and a non-significant effect in the panel study. This result indicates that sports organizations represent bonding social capital.
    Keywords: social capital; health; Norway
    JEL: I19
    Date: 2009–06–03
  3. By: Shogren, Jason F. (Department of Economics and Finance); Nævdal, Eric (Department of Economics and HERO)
    Abstract: This paper explores how collective social norms can have individual-level genetic foundation. Our study is the first we know to report a plausible link between genetically founded individual preferences in a fraction of a population and social norms governing behavior of all individuals. As our motivating example, we focus on patterns of Excessive Drinking in Social Situations (EDSS) across Europe that are possibly triggered by genetically caused variations in personality. The genetic trait is shyness, which correlates with eye color. We present empirical results indicating that alcohol consumption in social situations correlate with eye color and a model which suggests that conditions exist in which EDSS can emerge as a strategy in a larger fraction of the population than is genetically predisposed to EDSS. In addition, our model shows that alcohol taxes may be counter-productive in controlling the emergence of EDSS as a social norm.
    Keywords: Excessive Drinking in Social Situations (EDSS); drinking behavior; genetically founded individual preferences; sosial norms
    JEL: I12 I18
    Date: 2009–06–04
  4. By: Marcel Fafchamps (University of Oxford); Marco van der Leij (Universidad de Alicante); Sanjeev Goyal (Department of Economics, Queen Mary)
    Abstract: The matching of individuals in teams is a key element in the functioning of an economy. The network of social ties can potentially transmit important information on abilities and reputations and also help mitigate matching frictions by facilitating interactions among ¿screened¿ individuals. We conjecture that the probability of i and j forming a team is falling in the distance between i and j in the network of existing social ties. The objective of this paper is to empirically test this conjecture. We examine the formation of coauthor relations among economists over a twenty year period. Our principal finding is that a new collaboration emerges faster among two researchers if they are ¿closer" in the existing coauthor network among economists. This proximity effect on collaboration is strong: being at a network distance of 2 instead of 3, for instance, raises the probability of initiating a collaboration by 27 percent. Research collaboration takes place in an environment where fairly detailed information concerning individual ability and productivity -reflected in publications, employment history, etc.- is publicly available. Our finding that social networks are powerful even in this setting suggests that they must affect matching processes more generally.
    Keywords: coauthorship network, matching, network effects, network formation.
    JEL: C78 D83 D85
    Date: 2009–01
  5. By: Uwe Cantner (Friedrich Schiller University Jena, Department of Economics and Business Adminstration); Elisa Conti (IULM University, Department of Economics and Marketing); Andreas Meder (Graduate College EIC, Friedrich Schiller University Jena and Thuringian Ministry of Economic Affairs)
    Abstract: The claim of a positive association between a firm's social assets and its innovative capacity is a widely debated topic in the literature. Although controversial, such an argument has informed recent innovation policy across Germany, increasingly directed to cluster formation. In the light of the growing attention and financial efforts that cluster-based innovation policies are receiving, it is worth answering two main questions. First, are firms with a relatively high level of social capital likely to be more innovative? Second, do companies pursuing innovation in partnership innovate more? This paper empirically answers these questions by exploring a cross-sectoral sample of 248 firms based in the Jena region. On the one hand, the extent to which a firm is integrated in its community life does not contribute to an explanation of its innovative performance. On the other hand, directed cooperation with the specific goal of innovating shows a positive impact on innovative performance. However, the correlation between the extent of the network of co-innovators and firms' innovative capacity presents an inverted U-shaped relation: there is a threshold in the number of co-innovators justified by the costs of innovating by interacting. A policy lesson can be drawn from these findings: cluster-based policies are to be treated with caution as firms face costs of networking and not merely benefits.
    Keywords: innovation, social capital, innovation network, innovation cooperation, cluster-based policy.
    JEL: O33 L14 R5
    Date: 2009–06–02
  6. By: Entorf, Horst (University of Frankfurt); Tatsi, Eirini (University of Frankfurt)
    Abstract: We test potential social costs of educational inequality by analysing the influence of spatial and social segregation on educational achievements. In particular, based on recent PISA data sets from the UK and Germany, we investigate whether good neighbourhoods with a relatively high stock of social capital lead to larger 'social multipliers' than neighbourhoods with low social capital. Estimated 'social multipliers' are higher for the German early tracking schooling system than for comprehensive schools in the UK. After aggregating data and employing the Oaxaca-Blinder decomposition, the results suggest that the educational gap between natives and migrants is mainly due to the 'endowment effect' provided by the socioeconomic background of parents and cultural capital at home. Some adverse 'integration effects' do exist for female migrants in Germany who lose ground on other groups.
    Keywords: peer effects, identification, social interaction, reflection problem, empirical analysis, education, migrants
    JEL: I20 J15 J18 O15 Z13
    Date: 2009–05
  7. By: Pamela Lenton (Department of Economics, The University of Sheffield); Paul Mosley (Department of Economics, The University of Sheffield)
    Abstract: We argue that trust can be incentivised by measures which increase the ability of trusters to protect themselves against risk. We work within the framework originally established by Berg, Dickhaut and McCabe (1995) in which trust is measured experimentally as the ability to generate reciprocity in response to an initial offer of money within a two-person game. An incentive is conveyed both by means of variations in the multiplier applied to the first player’s initial offer and by giving the first player the opportunity to insure themselves against the possibility that the second player will fail to reciprocate their initial offer. Measured trust is strongly responsive to both these incentives. Thus third parties have the ability to influence the outcome of the game, not only, as in the analysis of Charness et al (2008), by punishing failure to reciprocate and rewarding ‘good’ initial offers, but also by offering protection which strengthens the first player’s risk efficacy, or ratio of assets to risk.
    Keywords: Experimental economics; Game theory; Risk; Reciprocity
    JEL: A13 C70 C73 D81
    Date: 2009–03
  8. By: John Duffy; Felix Munoz-Garcia
    Abstract: This paper investigates how the introduction of social preferences affects players` equilibrium behavior in both one-shot and infinitely repeated versions of the Prisoner`s Dilemma game. We first show that defection survives as the unique equilibrium of the stage game if at least one player is not too concerned about inequity aversion. Second, we demonstrate that in the infinitely repeated version of the game, fairness concerns operate as a `substitute` for time discounting, as fairness helps sustain cooperation for lower discount factors. We then extend our results to more general simultaneous-move games, and more general preferences. Finally, we point out the implications of our findings for the design and analysis of experiments involving repeated games. In particular, repeated game equilibria which are thought to be supported by sufficiently large discount factors, may in fact be sustained by a combination of discounting and social preference parameters, an observation that may help rationalize recent experimental findings.
    JEL: C72 C73 H43 D91
    Date: 2009–05
  9. By: Constanze Dobler (Universität Hohenheim)
    Abstract: Despite many approaches of neoclassical and endogenous growth theory, economists still face problems in explaining the reasons for income differences between countries. Institutional economics and the deep determinants of growth literature try to depart from pure economic facts to examine economic development. Therefore, this article analyzes the impact of institutions, geography, and integration on per capita income. Concerning theoretical reasoning, emphasis is on the emergence of institutions and their effect on economic growth. However, institutions can appear in different shapes since political, legal, and economic restrictions are not the only constraints on human behaviour. Norms and values also limit possible actions. Therefore, a differentiation between formal and informal institutions is made. Informal institutions are defined as beliefs, attitudes, moral, conventions, and codes of conduct. Property rights are assumed to be the basic formal institutional feature for economic success. Despite their direct impact on growth through individual utility maximization, property rights also make a statement concerning the political and legal environment of a country. Regarding the regression analysis, different religious affiliations are used as instrumental variables for formal and informal institutions. The regression results affirm a crucial role of informal and formal institutions concerning economic development. However, a high proportion of Protestant citizens encourage informal institutions that support economic growth, while a high Muslim proportion of the population is negatively correlated with growth-supporting formal institutions.
    Keywords: culture, economic development, institutions, property rights, religion
    JEL: A13 H11 Z10 Z12 Z13
    Date: 2009–03
  10. By: Thomas Grebel (Economics Department, University of Jena)
    Abstract: Economic behavior strives for efficiency. Therefore, also evolving network structures should be a result of such a goal-oriented behavior. Traditionally, networks were assumed to be only temporary phenomena, since the prevailing organizational forms that comply with the efficiency postulate are either firms or markets. Having a goal in mind, however, does not incur a set of unique choices of action, especially in situations under high uncertainty when engaging in invention networks. Consequently, there is no uniqueness in network structures. There is a random part in network evolution driven by generic mechanisms. A percolation model is used to model the generic development of invention networks. A Monte-Carlo simulation underlines the expectable patterns of network evolution. Moreover, it is tried to align the generic part of the story to the operant level where entrepreneurial behavior and market selection takes over the dominant role in network formation.
    Keywords: R&D cooperation, percolation theory, knowledge diffusion, networks
    JEL: A10 B10 B21 B25 B41 B52 C15 D85 I10 O10 O33
    Date: 2009–05–25
  11. By: Gabriel Felbermayr; Benjamin Jung; Farid Toubal
    Abstract: Influential empirical work by Rauch and Trindade (REStat, 2002) finds that Chinese ethnic networks of the magnitude observed in Southeast Asia increase bilateral trade by at least 60%. We argue that this estimate is upward biased due to omitted variable bias. Moreover, it is partly related to a preference effect rather than to enforcement and/or the availability of information. Applying a theory-based gravity model to ethnicity data for 1980 and 1990, and focusing on pure network effects, we find that the Chinese network leads to a more modest amount of trade creation of about 15%. Using new data on bilateral stocks of migrants from the World Bank for the year of 2000, we extend the analysis to all potential ethnic networks. We find, i.a., evidence for a Polish, a Turkish, a Mexican, or an Indian network. While confirming the existence of a Chinese network, its trade creating potential is dwarfed by other ethnic networks.
    Keywords: Gravity model, international trade,network effects, international migration. regression
    JEL: F22 F12
  12. By: Svetlana Pevnitskaya (Department of Economics, Florida State University); Dmitry Ryvkin (Department of Economics, Florida State University)
    Abstract: Bargaining fails when participants do not reach an agreement despite an opportunity for Pareto improvement. Numerous experimental studies found that in asymmetric bargaining, where one party proposes the terms and the other can accept or reject the proposal, low offers are typically rejected. We conduct an experiment where upon acceptance the responding party can apply costly rewards and/or punishments, and find that the likelihood of acceptance increases. The least generous offers have the highest chance to be accepted in the presence of punishment alone. Proposers are most generous when responders can both reward and punish, and offer least (even compared to the baseline) when responders can only reward. The optimal scheme of rewards and punishments varies with the population of proposers, indicating that the appropriate scheme can potentially compensate for a mismatch between proposers' and responders' social norms.
    Keywords: bargaining, rewards and punishments, experimental economics, ultimatum
    JEL: C78 C90
    Date: 2009–04
  13. By: Sheila Mammen (Department of Resource Economics, University of Massachusetts Amherst); Jean W. Bauer (Family Social Sciences Department, University of Minnesota); Daniel Lass (Department of Resource Economics, University of Massachusetts Amherst)
    Abstract: The satisfaction with life (SWL) among rural low-income mothers was assessed using a sample of 163 mothers who participated in a multi-state, three-year longitudinal study. Dependent variables included those that represented various forms of capital (health, human, personal and social) as well as the mothers’ levels of life satisfaction from prior years. Nearly two-thirds of the rural mothers were satisfied with their life in all three years. Their level of satisfaction appeared to be constant, however, such persistence had a time frame of only one year. In all three years, their depression score and the adequacy of their income had a significant effect on SWL. Their confidence as a parent and home ownership affected their life satisfaction during two years. Finally, their satisfaction with social relationships, age of the youngest child, and total number of children had an impact on their life satisfaction for one year.
    Keywords: Satisfaction with life, rural low-income mothers, health capital, human capital, personal capital, social capital, homeostatis
    JEL: I30 I31 I32 I39
    Date: 2009–02
  14. By: Antonio Acconcia (Università di Napoli Federico II and CSEF); Giovanni Immordino (Università di Salerno and CSEF); Salvatore Piccolo (University of Naples "Federico II", CSEF and Toulouse School of Economics,); Patrick Rey (Toulouse School of Economics and IDEI)
    Abstract: The optimal accomplice-witnesses regulation is characterized in a model with hierarchical criminal organizations and corruption. We identify the determinants of the optimal amnesty rate and show that such a policy stifles incentives for crime as well as corruption. We argue that rewarding informants is sometimes necessary to fight organized crime and show how the optimal amnesty rate varies with the effectiveness of the witnesses-protection program, the reliability of the informants’ testimonies and the degree of trust and cohesion between the members of the organizations. The implications of our analysis are tested by exploiting a quasi-experimental panel data set, relative to 95 Italian provinces. The evidence allows to identify the positive e¤ect of the policy on prosecution as well as its deterrence effect on crimes. Moreover, by using data on the number of accomplices we also underscore the positive impact of the policy on corruption prosecution.
    Keywords: Accomplice-witnesses, Criminal Organizations, Leniency, Whistle-Blower
    Date: 2009–06–10
  15. By: Parker, Simon C. (University of Western Ontario)
    Abstract: I explore the factors that determine whether new business opportunities are exploited by starting a new venture for an employer ('nascent intrapreneurship') or independently ('nascent entrepreneurship'). Analysis of a nationally representative sample of American adults gathered in 2005-06 uncovers systematic differences between the drivers of nascent entrepreneurship and nascent intrapreneurship. Nascent entrepreneurs tend to leverage their general human capital and social ties to organize ventures which sell directly to customers, whereas intrapreneurs disproportionately commercialize unique new opportunities which sell to other businesses. Implications of the findings are discussed.
    Keywords: nascent entrepreneurship, intrapreneurship, sample selection
    JEL: L26 M13
    Date: 2009–05
  16. By: Mina Baliamoune-Lutz
    Abstract: We examines how institutional and policy reforms affect the relationship between entreprene urship and growth. We perform Arellano-Bond GMM estimations on annual data (over the period 1990-2002) from a large group of developing countries and focus in particular on the interplay between policy and institutional reforms and entrepreneurship. We find that the joint effect of trade reform and entrepreneurship on growth is negative, suggesting that trade reform diminishes the positive effects of entrepreneurial ability on growth, while the joint effect of financial sector reform and entrepreneurship has a non- linear impact on growth. Financial sector reforms enhance the growth effects of entrepreneurship at initial levels and diminish it a high levels of reform. In addition, we find that the interplay of institutional reform and entrepreneurship does not seem to matter for the growth effects of entrepreneurship.
    Keywords: growth, entrepreneurship, institutions, policy reform
    JEL: E6 O1 O4
    Date: 2008–06
  17. By: Benito Arruñada; Xosé H. Vázquez
    Abstract: The paper explores the consequences that relying on different behavioral assumptions in training managers may have on their future performance. We argue that training with an emphasis on the standard assumptions used in economics (rationality and self-interest) leads future managers to rely excessively on rational and explicit safeguarding, crowding out instinctive contractual heuristics and signaling a ‘bad’ type to potential partners. In contrast, human assumptions used in management theories, because of their diverse, implicit and even contradictory nature, do not conflict with the innate set of cooperative tools and may provide a good training ground for such tools. We present tentative confirmatory evidence by examining how the weight given to behavioral assumptions in the core courses of the top 100 business schools influences the average salaries of their MBA graduates. Controlling for the average quality of their students and some other schools’ characteristics, average salaries are significantly greater for those schools whose core MBA courses contain a higher proportion of management courses as opposed to courses based on economics or technical disciplines.
    Keywords: Evolutionary psychology, economics, management, contractual heuristics, rationality, self-interest
    JEL: A23 B41 D01 D87 M12 M51
    Date: 2009–06

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