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on Social Norms and Social Capital |
| By: | Hudson, John |
| Abstract: | Social capital represents the potential networks open to an individual. But potential does not mean that it is exploited. Social voice is defined as the ability of an individual to make use of their social capital. We analyze a particular aspect of ‘social voice’, i.e. the ability to persuade others. Using a Bayesian framework we conclude that this should increase with education and the frequency with which the social network considers new ideas or issues. The impact of age is ambiguous. An individual’s knowledge should increase, but so too should the strength of prior beliefs within their social network. Empirical work based on Eurobarometer data confirms the importance of education and that social voice declines with age. It also finds evidence for a gender gap, which education only partially corrects, but marriage magnifies. Finally we confirm that social voice impacts on individual wellbeing. |
| Keywords: | social capital; gender; education marriage |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eid:wpaper:15972&r=soc |
| By: | Germana Bottone (ISAE - Institute for Studies and Economic Analyses) |
| Abstract: | The notions of human capital and growth have been debated for a long time in economic literature. The limits of these concepts are generally recognised. In fact, recently, there has been an attempt to articulate a more extensive definition of “human capital” by considering all the attributes embodied in individuals that are relevant to economic activity. On the other hand, the GDP growth rate has been included into the Human Development Index, taking into account different aspects of development such as life expectation, literacy and health. Nevertheless, the evolution of the definitions of human capital and growth is in some way restricted to their economic meaning, neglecting the intrinsic complexity of concepts demanding an in-depth re-examination of their social, cultural, and historical value. Using an interdisciplinary approach, this paper focuses on the conceptual meaning of progress. Progress was considered as the economic, social, and cultural evolution of a country. The idea of evolution has ancient roots and is subjective. In economic and social terms, evolution may be deemed as the path human beings follow towards freedom. Since the earliest times, humanity has been fighting against poverty, scarcity of resources, disease, abuse of power by a group, environmental disaster. In order to give a more complex definition of progress entailing the idea that freedom is its driving force, we used the main concepts of institutional and evolutionary economics. Highlighting the contributions of the best Old Institutionalists (Veblen, Commons, Dewey, and Ayres), we introduced two alternative notions: “knowledge” in place of human capital and “progress” instead of economic growth. Local knowledge is the most important factor of development, while, on the other hand, the model of ongoing institutional change is the “alarm bell” for progress or stagnation. In this way, institutional change towards freedom and the providing of incentives for progressive forces become a proxy for the level of cultural, social, and economic progress reached by a society. Progressive forces may grow in societies where there are no barriers to the free exchange of opinions and knowledge and where education and training systems are conceived to create autonomous people. The enemy of progressive forces are “ceremonial institutions”, that is institutions opposing any kind of renewal. Using the available data, we showed that the GDP growth rate is not necessarily a factor of human life satisfaction and it does not necessarily improve the quality of life. We compared some European Countries to demonstrate that there is no clear-cut link between material wealth and the quality of life. Instead, at a given level of material wealth, the freedom of choice and the governance indicators seem much more correlated to life satisfaction. Finally, utilizing the Veblen’s notion of “recursive causality”, we highlighted that it is possible for policy makers to foster a given institutional context rather than an alternative one. Therefore, it is possible that the culture of “GDP growth” has influenced institutions and has created a number of problems (pollution, social distrust, social immobility, life dissatisfaction, corruption, and rent-seeking) which emerged in the recent financial and economic crisis. |
| Keywords: | human capital, growth, institutional economics. |
| JEL: | J24 J31 O3 B52 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:isa:wpaper:117&r=soc |
| By: | Kocher, Martin (Department of Economics, University of Munich,); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Visser, Martine (School of Economics, University of Cape Town) |
| Abstract: | Studies have shown that there are differences in cooperative behavior across countries. Furthermore, differences in the use and the reaction on the introduction of a norm enforcement mechansism have been documented in cross-cultural studies, recently. We present data which prove that stark differences in both dimensions can exist even within the same town. For this end, a unique data set was created, based on public goods experiments conducted in South Africa. Most of the group differences can, however, be explained by variables accounting for social capital and social environment, such as trust or household violence.<p> |
| Keywords: | Cooperation; public goods; punishment; experiment; social capital; South Africa |
| JEL: | C72 C91 H41 Z13 |
| Date: | 2009–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0385&r=soc |
| By: | Smith, John |
| Abstract: | We interpret the social identity literature and examine its economic implications. We model a population of agents from two exogenous and well defined social groups. Agents are randomly matched to play a reduced form bargaining game. We show that this struggle for resources drives a conflict through the rational destruction of surplus. We assume that the population contains both unbiased and biased players. Biased players aggressively discriminate against members of the other social group. The existence and specification of the biased player is motivated by the social identity literature. For unbiased players, group membership has no payoff relevant consequences. We show that the unbiased players can contribute to the conflict by aggressively discriminating and that this behavior is consistent with existing empirical evidence. |
| Keywords: | reputation; identity; conflict |
| JEL: | L14 D74 C72 |
| Date: | 2009–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2213&r=soc |
| By: | Breuer, Janice; McDermott, John |
| Abstract: | Trust is often considered a determinant of economic performance. The exogeneity of trust, however, is questionable. We develop a model with heterogeneous agents to determine aggregate trustworthiness, trust, and output. People differ according to their risk aversion (caution). The distribution of risk aversion across individuals -- along with the threat of punishment -- is critical in the process by which trust is formed. The mean and variance of the distribution of caution have direct and indirect effects on trust. For the mean, the direct effect of caution is intuitive: societies with more cautious populations would have less trust. The indirect effect, however works through the perception of trustworthiness and leads to more trust. The net effect is, paradoxically, positive in homogenous societies. In heterogeneous societies, the reverse is true. Trust and output are endogenous, and not monotonically related across countries with different moments of the distribution of caution. |
| Keywords: | trust; trustworthiness; risk aversion; caution; output |
| JEL: | Z1 C7 Z13 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18112&r=soc |
| By: | Cowan, Robin (UNU-MERIT, and BETA, Universite Louis Pasteur); Jonard, Nicolas (Universite du Luxembourg.); Sanditov, Bulat (UNU-MERIT, and Maastricht University) |
| Abstract: | This paper presents an economic model of R&D network formation through the creation of strategic alliances. Firms are randomly endowed with knowledge elements. They base their alliance decisions purely on the technological fit of potential partners, ignoring social capital considerations and indirect benefits on the network. This is sufficient to generate equilibrium networks with the small world properties of observed alliance networks, namely short pairwise distances and local clustering. The equilibrium networks are more clustered than "comparable" random graphs, while they have similar characteristic path length. Two extreme regimes of competition are examined, to show that while the competition has a quantitative effect on the equilibrium networks (density is lower with competition), the small world features of the equilibrium networks are preserved. |
| Keywords: | network formation, small worlds, R&D networks, strategic alliances, business clusters |
| JEL: | D85 O32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009042&r=soc |
| By: | Harminder Battu (University of Aberdeen); Yves Zenou (Stockholm University, Research Institute of Industrial Economics (IFN) and CREAM) |
| Abstract: | Where a community or group is socially excluded from a dominant group, some individuals of that group may identify with the dominant culture and others may reject that culture. The aim of this paper is to investigate this issue by empirically analyzing the potential trade-off for ethnic minorities between sticking to their own roots and labour market success. We find that the social environment of individuals and attachments to culture of origin has a strong association with identity choice. Our results also suggest that those non-whites who have preferences that accord with being "oppositional" do experience an employment penalty. |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:200924&r=soc |
| By: | Jian Cai |
| Abstract: | It is well recognized that loan syndication generates a moral hazard problem by diluting the lead arranger's incentive to monitor the borrower. This paper proposes and tests a novel view that reciprocal arrangements among lead arrangers serve as an effective mechanism to mitigate this agency problem. Lender arrangements in about seven out of ten syndicated loans are reciprocal in the sense that lead arrangers also participate in loans that are led by their participant lenders. I develop a model in which syndicate lenders share reciprocity through such arrangements in a repeated-game setting as monitoring effort enhances lead arrangers' ability to profit from participating in loans led by others. The model generates specific predictions that I then confront with the data. I find strong and consistent empirical evidence on the reciprocity effect. Controlling for lender, borrower, and loan characteristics, I show that: (i) lead arrangers retain on average 4.3% less of the loans with reciprocity than those without reciprocity, (ii) the average interest spread over LIBOR on drawn funds is 11 basis points lower on loans with reciprocity, and (iii) the default probability is 4.7% lower among loans with reciprocity. These results indicate a cooperative equilibrium in loan syndication and have important implications to lending institutions, borrowing firms, and regulators. |
| Keywords: | Loans |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0909&r=soc |
| By: | Emmanuel PETIT (GREThA UMR CNRS 5113) |
| Abstract: | We test the effect of emotions on moral behaviour in a one shot gift-exchange game. Using the emotional induction technique, we induce either positive or negative emotions to the subjects before they play the game. We also consider a control treatment, without any affect manipulation. Emotional induction was effective: participants who saw the shocking and appalling movie reported significantly stronger negative emotions and weaker positive emotions than those who saw the funny movie. We find that players’ choices differ significantly across emotional conditions: we observe essentially that second movers who experience positive or neutral emotions do reciprocate whereas subjects overwhelmed with indignation, anger or guilt feelings show a very strong unconditional generous behaviour and do not reciprocate at all. We argue that indignation has a strong proactive force which allows subjects to reveal to themselves their own true values. |
| Keywords: | Emotions; moral values; gift-exchange game |
| JEL: | A12 C70 C91 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2009-10&r=soc |
| By: | Dawson, Peter; Dobson, S |
| Abstract: | This study considers the influences on agents’ decisions in an international context. Using data from five seasons of European cup football matches it is found that referees favour home teams when awarding yellow and red cards. Previous research on referee decisions in national leagues has identified social pressure as a key reason for favouritism. While social pressure is also found to be an important influence in this study, the international setting shows that nationality is another important influence on the decision-making of referees. In considering principal-agent relationships account needs to be taken not only of how agents (referees) decide under social pressure but also of how national identity shapes agents’ decision making. |
| Keywords: | social pressure; nationality; decision-making; referee home bias; football |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eid:wpaper:15970&r=soc |
| By: | Maroš Servátka (University of Canterbury); Radovan Vadovic |
| Abstract: | Experimental evidence suggests the size of the foregone outside option of the first mover does not affect the behavior of the second mover in the lost wallet game. In this paper we experimentally compare the behavior of subjects when they face an outside option with unequal payoffs, i.e., the first mover gets 10 and the second mover gets 0, and when they face an outside option with equal payoffs, i.e., both get 5. Consistent with the most of the literature we do not find a significant difference in behavior of second movers. |
| Keywords: | Experimental economics; fairness; inequality; lost wallet game; outside option |
| JEL: | C72 C78 C91 |
| Date: | 2009–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:09/14&r=soc |
| By: | Hjalmarsson, Randi (University of Maryland); Lindquist, Matthew (Dept. of Economics, Stockholm University) |
| Abstract: | This paper studies intergenerational correlations in crime between fathers and their children and the underlying mechanisms that give rise to these correlations. Using data from the Stockholm Birth Cohort, we find strong evidence of an intergenerational criminal relationship. Sons whose fathers have at least one sentence have 2.06 times higher odds of having a criminal conviction than sons whose fathers do not have any sentence. At the intensive margin, one additional sentence of the father increases the expected number of sons’ convictions by 32 percent. Fatherdaughter relationships are generally not significantly different than fathers-son relationships. Traditional regression techniques indicate that socioeconomic status accounts for roughly one-third of the extensive margin father-son relationship and somewhat less, particularly at the intensive margin, for daughters. Over and above this, for both sons and daughters, our ability proxies account for an additional 20 percent. Finally, household heterogeneity, the most important component of which is household instability, accounts for almost one-third of the intergenerational relationships. More direct evidence regarding whether the intergenerational correlations arise through either an inherited traits mechanism or a father as role model mechanism is provided in four alternative experiments. These experiments focus on: (i) a sample of twins, (ii) an adoptee sample, (iii) the timing of the father’s crime, and (iv) the quality of the father – child relationship. We find evidence that both direct channels play a role in the reproduction of crime from one generation to the next. Finally, we find that paternal incarceration may actually lower the number of crimes committed by some children, providing additional evidence of the importance of a behavioral transference mechanism. |
| Keywords: | crime; illegal behavior; intergenerational crime; intergenerational mobility; risky behavior |
| JEL: | J62 K42 |
| Date: | 2009–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2009_0018&r=soc |
| By: | Wolfgang Frimmel; Martin Halla; Rudolf Winter-Ebmer |
| Abstract: | This paper documents that changes in assortative mating patterns over the last four decades along the dimensions of age, ethnicity and religion are not responsible for the increasing marital instability in Austria. Quite the contrary, without the rise in the age at marriage, divorce rates would be considerably higher. Immigration and secularization, and the resulting supply of spouses with diverse ethnicity and religious denominations had no overall effect on divorce rates. Countervailing effects – in line with theoretical predictions – offset each other. The rise in the incidence in divorce is most probably caused by changing social norms. |
| Keywords: | Assortative mating, divorce, marital instability, immigration |
| JEL: | J12 J11 J15 Z12 D1 R2 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2009_18&r=soc |