nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2010‒02‒27
eight papers chosen by
Fabio Sabatini
University of Siena

  1. Family Values and the Regulation of Labor By Alesina, Alberto; Algan, Yann; Cahuc, Pierre; Giuliano, Paola
  2. Social Capital, Community Governance and Credit Market By Luca Andriani
  3. Essays on resources and institutions. By Sarr, M.
  4. Trust, Information Acquisition and Financial Decisions: A Field Experiment By Sonia Di Giannatale; Alexander Elbittar; Patricia López Rodriguez; María José Roa
  5. Intrinsic Motivations and the Non-Profit Health Sector: Evidence from Ethiopia By Serra, Danila; Serneels, Pieter; Barr, Abigail
  6. Village economies and the structure of extended family networks. By Angelucci, M.; De Giorgi, G.; Rangel, M.; Rasul, I.
  7. Organization, learning and cooperation. By Barr, Jason; Saraceno, Francesco
  8. Dialects, Cultural Identity, and Economic Exchange By Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Suedekum, Jens

  1. By: Alesina, Alberto (Harvard University); Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris); Giuliano, Paola (University of California, Los Angeles)
    Abstract: Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots.
    Keywords: family values, labor regulation
    JEL: E0 P16 Z10 Z13
    Date: 2010–02
  2. By: Luca Andriani (Department of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: Financial contracts represent an exchange of financial resources today, such as money, for a promise to return more financial resources tomorrow. The aim of the paper is to test whether cheating or respecting a promise, in particular a “financial one”, is also a matter of community norms in which the individuals are involved. According to the social capital literature, where a community is characterised by a high level of social capital, then a higher level of civic engagement, trustworthiness and self monitoring among its members occur. These elements characterise the so called community governance. By using regional data from Italy, the paper will analyse the association between the community governance, through different aspects of social capital, and credit market variables such as interest rate, credit supply and insolvency rate without and with legal institutional enforcements. Empirical evidence shows that, in absence of legal enforcement, indicators of structural social capital, civic engagement and outcome-based social capital are positively related to better credit market performances. When legal enforcement is included in our models still social capital, through the civic engagement aspect, negatively affects the insolvency rate by confirming our hypothesis of complementarity among community state and market.
    Date: 2010–01
  3. By: Sarr, M.
    Abstract: This thesis consists of four essays covering two sets of issues linking resources to institutions. Chapter 1 provides a summary of the thesis. Chapter 2 provides a general overview of the resource curse literature, emphasising the role of institutions, the nature of the political regimes in resource-rich countries and the link with civil conflicts. Chapter 3 examines the implications of liberal lending practices of international credit markets to dictators during resource booms. We show that the combination of institutional weaknesses such as unaccountable leadership and unsound lending may give autocrats perverse incentives to loot and destabilise their countries, which impedes economic growth. Chapter 4 investigates what motivates some dictators in resource-rich countries to invest in productivity enhancing public goods while others deliberately choose predatory or repressive policies. We find that the ruler is more likely invest in public goods when the productivity of the non-resource sector is high, and when he is relatively ineffective in controlling the country's resources. Chapter 5 presents an overview of the literature on intellectual property rights focusing on the problems raised by sequential innovations for the design of patents and the role of legal institutions in resolving disputes. Chapter 6 examines the nature of the North-South divide in the bioscience industries as a hold-up problem caused by the lack of coordination between North and South property rights systems. We develop a model of bargaining in a sequential R&D framework that demonstrates the mechanism by which underinvestment in maintaining biodiversity and inefficient flow of information occurs. Chapter 7 assumes that the coordination problem is resolved and investigates the number and placement of the property rights to provide incentives for efficient investment in information generation. We show that the existence of a property right in the genetic resources is necessary for the South to share in the rents from the R&D sector. When traditional knowledge is the South's private information, it is not necessary to establish a separate property right in it to appropriate its return.
    Date: 2009–03
  4. By: Sonia Di Giannatale (Centro de Investigación y Docencia Económicas); Alexander Elbittar (Centro de Investigación y Docencia Económicas); Patricia López Rodriguez (Universidad Iberoamericana); María José Roa (Centro de Investigación y Docencia Económicas)
    Abstract: In this paper we analyze the relationship between financial decisions, information acquisition, and trust. In particular, our hypothesis is that financial transactions depend, among other variables, on the level of trust, reciprocity and association among individuals. Also, individuals’ willingness to acquire and process information relevant to perform financial transactions is related not only to their cognitive abilities, but also to the level of trust they have in the financial institutions. We conducted a field experiment using the trust game, with two important variations, with the partners of an of credit and savings cooperative located in a rural area of México. Our results indicate that those individuals who frequently visit their friends show greater willingness to trust other individuals. In contrast, those individuals who visit their families more regularly show less willingness to reciprocate, while active members of the cooperative show greater reciprocity. Regarding the acquisition of information, we find that just over 2/3 of the participants buy the maximum of pieces of information. However, none of the pieces of information acquired appears to affect the transfers among participants. Possibly for our experimental subjects trust plays an overextended role in financial decision making that makes information acquisition less relevant than it is for other types of individuals making the same sort of decisions.
    Keywords: Social Networks, Information, Social Preferences, Cooperation, Trust, Reciprocity, Financial Development, Field Experiments
    Date: 2010–02–17
  5. By: Serra, Danila (Florida State University); Serneels, Pieter (University of East Anglia); Barr, Abigail (University of Oxford)
    Abstract: Economists have traditionally assumed that individual behavior is motivated exclusively by extrinsic incentives. Social psychologists, in contrast, stress that intrinsic motivations are also important. In recent work, economic theorists have started to build psychological factors, like intrinsic motivations, into their models. Besley and Ghatak (2005) propose that individuals are differently motivated in that they have different "missions," and their self-selection into sectors or organizations with matching missions enhances organizational efficiency. We test Besley and Ghatak's model using data from a unique cohort study. We generate two proxies for intrinsic motivations: a survey-based measure of the health professionals’ philanthropic motivations and an experimental measure of their pro-social motivations. We find that both proxies predict health professionals' decision to work in the non-profit sector. We also find that philanthropic health workers employed in the non-profit sector earn lower wages than their colleagues.
    Keywords: sector choice, intrinsic motivation, non-profit
    JEL: C93 I11 J24
    Date: 2010–02
  6. By: Angelucci, M.; De Giorgi, G.; Rangel, M.; Rasul, I.
    Abstract: This paper documents how the structure of extended family networks in rural Mexico relates to the poverty and inequality of the village of residence. Using the Hispanic naming convention, we construct within-village extended family networks in 504 poor rural villages. Family networks are larger (both in the number of members and as a share of the village population) and out-migration is lower the poorer and the less unequal the village of residence. Our results are consistent with the extended family being a source of informal insurance to its members.
    Date: 2009
  7. By: Barr, Jason; Saraceno, Francesco (Centre de recherche en économie de Sciences Po)
    Abstract: This paper models the organization of the firm as a type of artificial neural network in a duopoly setting. The firm plays a repeated Prisoner’s Dilemma type game, and must also learn to map environmental signals to demand parameters and to its rival’s willingness to cooperate. We study the prospects for cooperation given the need for the firm to learn the environment and its rival’s output. We show how profit and cooperation rates are affected by the sizes of both firms, their willingness to cooperate, and by environmental complexity. In addition, we investigate equilibrium firm size and cooperation rates.
    Keywords: Artificial neural networks;; Prisoner’s Dilemma;; Cooperation;; Firm learning;
    JEL: C63 C72 D21 D83 L13
    Date: 2009–05
  8. By: Falck, Oliver (Ifo Institute for Economic Research); Heblich, Stephan (Max Planck Institute for Economics); Lameli, Alfred (University of Marburg); Suedekum, Jens (University of Duisburg-Essen)
    Abstract: We investigate whether time-persistent cultural borders impede economic exchange across regions of the same country. To measure cultural differences we evaluate, for the first time in economics, linguistic micro-data about phonological and grammatical features of German dialects. These data are taken from a unique linguistic survey conducted between 1879 and 1888 in 45,000 schools. Matching this information to 439 current German regions, we construct a dialect similarity matrix. Using a gravity analysis, we show that current cross-regional migration is positively affected by historical dialect similarity. This suggests that cultural identities formed in the past still influence economic exchange today.
    Keywords: gravity, internal migration, culture, language, dialects, Germany
    JEL: R23 Z10 J61
    Date: 2010–02

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