nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2009‒09‒26
seventeen papers chosen by
Fabio Sabatini
University of Siena

  1. Trust in Others: Does Religion Matter? By Joseph Daniels; Marc von der Ruhr
  2. The Relationship between Stress and Social Capital among Police Officers By Martin Gächter; David Savage; Benno Torgler
  3. Caste as Community? Networks of social affinity in a South Indian village By Arora, Saurabh; Sanditov, Bulat
  4. Social Interactions within Cities: Neighborhood Environments and Peer Relationships By Stephen L. Ross
  5. What Goes Around Comes Around: A Theory of Indirect Reciprocity in Networks By Mihm, Maximilian; Toth, Russell; Lang, Corey
  6. Muslim Integration into Western Cultures: Between Origins and Destinations By Inglehart, Ronald; Norris, Pippa
  7. Do Race and Fairness Matter in Generosity? Evidence from a Nationally Representative Charity Experiment By Fong, Christina M.; Luttmer, Erzo F. P.
  8. The Right Amount of Trust By Jeffrey Butler; Paola Giuliano; Luigi Guiso
  9. A Laboratory Study of a Multi-Level Trust Game with Communication By Roman M. Sheremeta; Jingjing Zhang
  10. Student Network Centrality and Academic Performance: Evidence from United Nations University By Zhang, Ying; Rajabzadeh, Iman; Lauterbach, Rodolfo
  11. Altruism, Other-Regarding Behavior and Identity: The Moral Basis of Prosperity and Oppression By Basu, Kaushik
  12. Neighborhood Effects: Accomplishments and Looking Beyond Them By Yannis M. Ioannides; Giorgio Topa
  13. First We Try, Then We Trust! Real Options and the Cooperation-Competition Tension in Strategic Alliance Social Dilemmas By McCarter, Matthew W.; Mahoney, Joseph T.; Northcraft, Gregory B.
  14. Trust and the Reference Point for Trustworthiness in Gulf and Western Countries By Bohnet, Iris; Hermann, Benedikt; Zeckhauser, Richard
  15. The Effect of Collaboration Network on Inventors' Job Match, Productivity and Tenure By Ryo Nakajima; Ryuichi Tamura; Nobuyuki Hanaki
  16. The Welfare Effects of Social Mobility By Justina A.V. Fischer
  17. Nerves of Steel? Stress, Work Performance and Elite Athletes By David A. Savage; Benno Torgler

  1. By: Joseph Daniels (Center for Global and Economic Studies, Marquette University); Marc von der Ruhr (Department of Economics, Saint Norbert College)
    Abstract: Though the recent literature offers intuitively appealing bases for, and evidence of a linkage between religious beliefs, religious participation and economic outcomes, evidence on a relationship between religion and trust is mixed. By allowing for an attendance effect, disaggregating Protestant denominations, and using a more extensive data set, probit models of the General Social Survey (GSS), 1975 through 2000, show that Black Protestants, Pentecostals, fundamentalist Protestants, and Catholics, trust others less than individuals who do not claim a preference for a particular denomination. For conservation denominations the effect of religion is though affiliation not attendance. In contrast, liberal Protestants trust others more and this effect is reinforced by attendance. The impact of religion on moderate Protestants is only through attendance, as frequency of attendance increases trust of others while the denomination effect is insignificant.
    Keywords: religion, social trust
    JEL: Z12
    Date: 2009
  2. By: Martin Gächter; David Savage; Benno Torgler
    Abstract: This paper analyzes the effectiveness of social capital in reducing the negative externalities associated with stress, as well as the physical and psychological indicators of stress among police officers. Despite the fact that there is a large multidisciplinary literature on stress or on social capital, the link between both factors is still underexplored. In this empirical paper we therefore aim at reducing such a shortcoming. We focus on a strategically important work environment, namely law enforcement agents, that is not only characterized as physically and emotionally demanding, but also as an essential part for a well-functioning society due to the fact that inefficiencies in the police force can induce large negative externalities. Using a multivariate regression analysis focusing on nine different proxies for stress and two proxies for social capital and conducting several robustness checks, we find strong evidence that an increased level of social capital is correlated with a lower level of stress. From a policy perspective, our findings suggest that stress reduction programs should actively engage employees to build stronger social networks.
    Keywords: Social Capital, Trust, Stress, Police Officers
    JEL: I1 I31 J24 J81 Z13
    Date: 2009–09–10
  3. By: Arora, Saurabh (School of Innovation Sciences, Eindhoven University of Technology); Sanditov, Bulat (UNU-MERIT, Maastricht University)
    Abstract: We examine three theories of caste and community using new data on social networks among residents of a south Indian village. The first theory treats individual caste groups as separated communities driven by the Brahmanical ideology of hierarchy based on purity and pollution. The second theory departs from the first by placing kings and landlords at the centre of rural (primeval) social structure. Here ritual giving by kings provides the glue that holds a community together by transferring inauspiciousness to gift-recipients and ensuring community welfare. The third theory, that may be treated as a corollary of the second, argues that powerful leaders in the religious and political domains act as patrons of people in their constituencies and forge a sense of community. The resulting community may be single or multi-caste. Using a community structure algorithm from social network analysis, we divide the network of the village into thirteen tight-knit clusters. We find that no cluster or community in the social network has exactly the same boundaries as a caste group in the village. Barring three exceptions, all clusters are multi-caste. Our results are most consistent with the third theory: each cluster has a patron/leader who represents the interests of his constituency at village-level fora and bridges caste and community divides.
    Keywords: Social networks, culture, caste, social change, community development, rural India
    JEL: Z13 O10
    Date: 2009
  4. By: Stephen L. Ross (University of Connecticut)
    Abstract: Cities and their surrounding suburbs provide the homes, workplaces, and social and educational environments for most individuals and families in developed nations, but these urban areas are typically characterized by substantial stratification across racial, ethnic, and economic groups and associated with substantial levels of inequality. This chapter will examine our knowledge concerning the impact such stratification has on individual outcomes especially through its influence on the social interactions that occur within neighborhoods, schools, workplaces, and other institutions. The largest challenge faced in understanding the causal impact of social interactions arises from the fact that stratification is not an outside event, but rather is the result of individuals making choices that involve segregating themselves from others that differ in some way. The extent to which an individual makes segregating choices is invariably related to that individual's specific opportunities and therefore highly correlated with unobservables that drive that individual's success and life outcomes. Accordingly, the chapter will focus heavily on approaches for obtaining causal estimates of the effect of social interactions and evidence that arises from studies that have a convincing strategy for identifying these causal effects.
    Keywords: Neighborhood Effects, Peer Effects, Social Interactions, Friendship Networks
    JEL: I2 J1 J6 R2
    Date: 2009–09
  5. By: Mihm, Maximilian (Cornell University); Toth, Russell (Cornell University); Lang, Corey (Cornell University)
    Abstract: We consider strategic interaction on a network of heterogeneous long-term relationships. The bilateral relationships are independent of each other in terms of actions and realized payoffs, and we assume that information regarding outcomes is private to the two parties involved. In spite of this, the network can induce strategic interdependencies between relationships, which facilitate efficient outcomes. We derive necessary and sufficient conditions that characterize efficient equilibria of the network game in terms of the architecture of the underlying network, and interpret these structural conditions in light of empirical regularities observed in many social and economic networks.
    JEL: C73 D82 D85
    Date: 2009–08
  6. By: Inglehart, Ronald (University of Michigan); Norris, Pippa (Harvard University)
    Abstract: To what extent do migrants carry their culture with them, and to what extent do they acquire the culture of their new home? The answer not only has important political implications; it also helps us understand the extent to which basic cultural values are enduring or malleable; and whether cultural values are traits of individuals or are attributes of a given society. Part I considers theories about the impact of growing social diversity in Western nations. We classify two categories of society: ORIGINS (defined as Islamic Countries of Origin for Muslim migrants, including twenty nations with plurality Muslim populations) and DESTINATIONS (defined as Western Countries of Destination for Muslim migrants, including twenty?two OECD member states with Protestant or Roman Catholic majority populations). Using this framework, we demonstrate that on average, the basic social values of Muslim migrants fall roughly mid?way between those prevailing in their country of origin and their country of destination. We conclude that Muslim migrants do not move to Western countries with rigidly fixed attitudes; instead, they gradually absorb much of the host culture, as assimilation theories suggest.
    Date: 2009–03
  7. By: Fong, Christina M. (Carnegie Mellon University); Luttmer, Erzo F. P. (Harvard University)
    Abstract: We present a dictator game experiment where the recipients are local charities that serve the poor. Donors consist of approximately 1000 participants from a nationally representative respondent panel that is maintained by a private survey research firm, Knowledge Networks. We randomly manipulate the perceived race and worthiness of the charity recipients by showing respondents an audiovisual presentation about the recipients. The experiment yields three main findings. First, we find significant racial bias in perceptions of worthiness: respondents rate recipients of their own racial group as more worthy. Second, respondents give significantly more when the recipients are described as more worthy. These findings may lead one to expect that respondents would also give more generously when shown pictures of recipients belonging to their own racial group. However, our third result shows that this is not the case; despite our successfully manipulating perceptions of race, giving does not respond significantly to recipient race. Thus, while our respondents do seem to rate ingroup members as more worthy, they appear to overcome this bias when it comes to giving.
    JEL: C93 D63 D64 H41 J71
    Date: 2009–06
  8. By: Jeffrey Butler; Paola Giuliano; Luigi Guiso
    Abstract: A vast literature has investigated the relationship between trust and aggregate economic performance. We investigate the relationship between individual trust and individual economic performance. We .nd that individual income is hump-shaped in a measure of intensity of trust beliefs available in the European Social Survey. We show that heterogeneity of trust beliefs in the population, coupled with the tendency of individuals to extrapolate beliefs about others from their own level of trustworthiness, could generate the non-monotonic relationship between trust and income. Highly trustworthy individuals think others are like them and tend to form beliefs that are too optimistic, causing them to assume too much social risk, to be cheated more often and ultimately perform less well than those who happen to have a trustworthiness level close to the mean of the population. On the other hand, the low-trustworthiness types form beliefs that are too conservative and thereby avoid being cheated, but give up prfitable opportunities too often and, consequently, underperform. Our estimates imply that the cost of either excessive or too little trust is comparable to the income lost by foregoing college. Furthermore, we find that people who trust more are cheated more often by banks as well as when purchasing goods second hand, when relying on the services of a plumber or a mechanic and when buying food. We complement the survey evidence with experimental evidence showing that own trustworthiness and expectations of others' trustworthiness in a trust game are strongly correlated and that performance in the game is hump-shaped.
    Keywords: Trust, trustworthiness, economic performance, culture, false consensus
    JEL: A1 A12 D1 O15 Z1
    Date: 2009
  9. By: Roman M. Sheremeta; Jingjing Zhang
    Abstract: This experimental study explores how communication influences efficiency, trust and trustworthiness in a small group when one member is left out of communication. To study this problem, we introduce a novel three-player trust game where player 1 can send any portion of his endowment to player 2. The amount sent gets tripled. Player 2 decides how much to send to player 3. The amount is again tripled, and player 3 then decides the allocation among the three players. The baseline treatment with no communication shows that on average players 1 and 2 send significant amounts and player 3 reciprocates even though all players are randomly regrouped every period. When we add communication between players 2 and 3, the amounts sent and returned between these two increase. The interesting finding is that there are external effects of communication: player 1 who is outside communication sends 60% more and receives 140% more than in the no communication treatment. As a result, social welfare and efficiency increase from 48% to 73%.
    Keywords: Multi-level Trust Games; Experiments; Reciprocity; Communication
    JEL: C72 C91 D72
    Date: 2009–09
  10. By: Zhang, Ying (UNU-MERIT); Rajabzadeh, Iman (UNU-MERIT); Lauterbach, Rodolfo (UNU-MERIT)
    Abstract: In this paper we empirically studied the relationship between network centrality and academic performance among a group of 47 PhD students from UNU-MERIT institute. We conducted an independent email survey and relied on social networks theory as well as standard econometric procedures to analyse the data. We found a significant reversed U-shaped relation between network centrality and students' academic performance. We controlled our results by several node's characteristics such as age, academic background, and research area. Additional evidence shows that there is a negative impact of age on academic performance at PhD student level. Contributions of this paper can refer to the input into studies that aim to explore peereffect. Also it contributes to the methodological approach by combining elements of network analysis and econometric theories. This study demonstrates that when evaluating the impact of network centrality on performance, there is no significant difference between various network centrality measurements.
    Keywords: Networks analysis, Network centrality, Peer-effect, Academic performance
    JEL: D85 I21 I23 L14
    Date: 2009
  11. By: Basu, Kaushik (Cornell University)
    Abstract: Much of economics is built on the assumption that individuals are driven by self-interest and economic development is an outcome of the free play of such individuals. On the few occasions that the existence of altruism is recognized in economics, the tendency is to build this from the axiom of individual selfishness. The aim of this paper is to break from this tradition and to treat as a primitive that individuals are endowed with the 'cooperative spirit', which allows them to work in their collective interest, even when that may not be in their self-interest. The paper tracks the interface between altruism and group identity. By using the basic structure of a Prisoner's Dilemma game among randomly picked individuals and building into it assumptions of general or in-group altruism, the paper demonstrates how our selfish rationality interacts with our innate sense of cooperation. The model is used to outline circumstances under which cooperation will occur and circumstances where it will break down. The paper also studies how sub-groups of a society can form cooperative blocks, whether to simply do better for themselves or exploit others.
    Date: 2009–04
  12. By: Yannis M. Ioannides; Giorgio Topa
    Abstract: The paper addresses the empirical significance of the social context in economic decisions. Decisions of individuals who share spatial and social milieus are likely to be interdependent, and econometric identification of social effects poses intricate data and methodological problems, including dealing with self-selection in spatial and socail groups. It uses a simple empirical framework to introduce social interactions effects at different levels of aggregation, and examines estimation problems into linear models, the impact of self-selection and of non linearities. It also examines neighborhood effects in job matching and proposes a research agenda that offers new techniques and data sources.
    Keywords: Neighborhood effects, social interactions, social networks, social effects, self-selection, neighborhood choice, social multiplier, spatial effects
    JEL: C00 C81 J6 R22 Z13
    Date: 2009
  13. By: McCarter, Matthew W. (University of Illinois at Urbana-Champaign); Mahoney, Joseph T. (University of Illinois at Urbana-Champaign); Northcraft, Gregory B. (University of Illinois at Urbana-Champaign)
    Abstract: The cooperation-competition tension in strategic alliances creates a social dilemma where
    Abstract: member and alliance interests are in conflict. Because social dilemmas have significant
    Abstract: negative implications for strategic alliance and member success, understanding the
    Abstract: psychological mechanisms underpinning the cooperation-competition tension and ways to
    Abstract: navigate this tension holds important theoretical implications for strategic alliance research.
    Abstract: This paper proposes a real options approach to navigating strategic alliance social dilemmas.
    Abstract: Acquiring a real option at the alliance level provides alliance members access to achieving a
    Abstract: small win of mutual cooperation, and, when the small win is realized, members are more
    Abstract: likely to cooperate in the larger strategic alliance. The increase of cooperation is because
    Abstract: alliance member's perceived vulnerability is reduced. The level of exposure when acquiring
    Abstract: the real option may influence the effect of a small win on perceived vulnerability through the
    Abstract: development of trust.
    Date: 2009–01
  14. By: Bohnet, Iris (Harvard University); Hermann, Benedikt (European Commission); Zeckhauser, Richard (Harvard University)
    Abstract: Why is private investment so low in Gulf compared to Western countries? We investigate cross-regional differences in trust and reference points for trustworthiness as possible factors. Experiments controlling for cross-regional differences in institutions and beliefs about trustworthiness reveal that Gulf citizens pay much more than Westerners to avoid trusting, and hardly respond when returns to trusting change. These differences can be explained by subjects' gain/loss utility relative to their region's reference point for trustworthiness. The relation-based production of trust in the Gulf induces higher levels of trustworthiness, albeit within groups, than the rule-based interactions prevalent in the West.
    Date: 2009–06
  15. By: Ryo Nakajima; Ryuichi Tamura; Nobuyuki Hanaki
    Abstract: It has been argued in the economic literature that job search through informal job networks improves the employer-employee match quality. This paper argues that inventors' research collaboration networks reduce the uncertainty of firms about the match qualities of inventors prior to hiring. We estimate the effect of inventors' collaboration networks on their productivity and mobility using the U.S. patent application database. It is found that network- recruited inventors are more productive and have longer tenure than publicly recruited inventors. The evidence from fixed-effect regressions shows that the higher productivity and longer tenure of network-recruited inventors are not solely attributable to their unobserved ability. These results are consistent with the job match hypothesis between inventors and firms through their collaboration networks.
    Date: 2009
  16. By: Justina A.V. Fischer
    Abstract: The question whether a socially mobile society is conducive to subjective well-being (SWB) has rarely been investigated. This paper fills this gap by analyzing the SWB effects of intergenerational earnings mobility and equality in education at the societal level. Using socio-demographic information on 44 000 individuals in 30 OECD countries obtained from the World Values Survey, this study shows that living in a socially mobile society is conducive to individual life satisfaction. Differentiating between perceived and actual social mobility, we find that both exert rather independent effects, particularly in their interplay with income inequality. We identify a positive interaction of perceived social mobility that mitigates its overall SWB lowering effect, supporting Alesina et al. (2004). In contrast, a high degree of actual social mobility yields an overall impact of income inequality that is SWB lowering, while for low social mobility the effect of inequality is positive. These interactions hold stronger for pre-transfer than post-transfer income inequality. Actual social mobility appears to be appreciated only by conservative persons, while leftist oriented individuals are indifferent. Robustness is tested using a world sample.<BR>La question de savoir si une société socialement mobile est prédisposée au bien-être subjectif (SWB, d’après le sigle anglais) a rarement fait l’objet d’étude. Ce document vient combler ce manque en la matière en analysant les effets du SWB quant à la mobilité et l’égalité intergénérationnelle des gains dans l’éducation à un niveau sociétal. Cette étude s’est servie d’une information socio-démographique comptant 44 000 individus dans 30 pays membres de l’OCDE tirée de l’enquête World Values Survey. Cette étude montre que le fait de vivre dans une société socialement mobile est propice à une satisfaction de vie individuelle. En séparant la mobilité sociale perçue à celle qui est réelle, nous observons que les deux exercent une influence plutôt indépendante, en particulier dans leur action mutuelle avec les inégalités de revenus. Une interaction positive de mobilité sociale perçue est identifiée, celle-ci limitant son influence globale du bien-être subjectif à la baisse, selon Alesina et al. (2004). A contrario, un fort degré de mobilité sociale réelle génère une influence générale sur l’inégalité des revenus qui diminue le SWB alors que pour une faible mobilité sociale les effets de l’inégalité sont positifs. Ces relations réciproques sont plus solides pour des inégalités de revenus avant transferts qu’après transferts. La mobilité sociale réelle semble être appréciée seulement par les conservateurs, alors que les individus orientés plus à gauche sont indifférents. La robustesse est aussi examinée en utilisant un échantillon mondial.
    JEL: A14 D31 D63 I31 J62
    Date: 2009–09–16
  17. By: David A. Savage; Benno Torgler
    Abstract: There is a notable shortage of empirical research directed at measuring the magnitude and direction of stress effects on performance in a controlled environment. One reason for this is the inherent difficulties in identifying and isolating direct performance measures for individuals. Additionally most traditional work environments contain a multitude of exogenous factors impacting individual performance, but controlling for all such factors is generally unfeasible (omitted variable bias). Moreover, instead of asking individuals about their self-reported stress levels we observe workers’ behavior in situations that can be classified as stressful. For this reason we have stepped outside the traditional workplace in an attempt to gain greater controllability of these factors using the sports environment as our experimental space. We empirically investigate the relationship between stress and performance, in an extreme pressure situation (football penalty kicks) in a winner take all sporting environment (FIFA World Cup and UEFA European Cup competitions). Specifically, we examine all the penalty shootouts between 1976 and 2008 covering in total 16 events. The results indicate that extreme stressors can have a positive or negative impact on individuals’ performance. On the other hand, more commonly experienced stressors do not affect professionals’ performances.
    Keywords: Performance, Stressors, Sport, Behavioural Economics, Work-related stress
    JEL: D80 D81 J81 Z13
    Date: 2009–09–24

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.