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on Social Norms and Social Capital |
| By: | Bruno S. Frey; Alois Stutzer (University of Basel) |
| Abstract: | Over the last decades, empirical research on subjective well-being in the social<br />sciences has provided a major new stimulus to the discourse on individual happiness.<br />Recently this research has also been linked to economics where reported subjective wellbeing<br />is often taken as a proxy measure for individual welfare. In our review, we intend to<br />provide an evaluation of where the economic research on happiness stands and of three<br />directions it might develop. First, it offers new ways for testing the basic assumptions of the<br />economic approach and for going about a new understanding of utility. Second, it provides a<br />new possibility for the complementary testing of theories across fields in economics. Third,<br />we inquire how the insights gained from the study of individual happiness in economics affect<br />public policy.<br />Keywords: Economics, happiness, life satisfaction, survey data, income, public goods,<br />unemployment<br />JEL Classifications: A10, D60, H41, I31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:1424&r=soc |
| By: | Marco van der Leij (Universidad de Alicante); Sanjeev Goyal (Department of Economics, Queen Mary) |
| Abstract: | This paper examines the celebrated "Strength of weak ties" theory of Granovetter(1973). We formalize the theory in terms of two hypotheses: one, for any threeplayers with two links present, the probability of a third link being present isincreasing in the strength of the two ties, and two, the removal of a weak tieincreases average distance in the network more than the removal of a strong tie. We test these hypotheses using data on the network of coauthorship amongeconomists. We find support for the hypothesis of transitivity of strong ties, but we reject thehypothesis that weak ties reduce distance more than strong ties do. We then identify two general features of networks which explain these findings:significant inequality in the distribution of connections across individuals andstronger ties among individuals who have more connections. |
| Keywords: | network; strength of weak ties; core-periphery; co-authorship network |
| JEL: | A14 D85 Z13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2010-02&r=soc |
| By: | Jean-Paul Carvalho |
| Abstract: | Culture constrains individual choice by making certain behaviour taboo. We propose an evolutionary model in which members of different groups attempt to coordinate over time. We show that cultural constraints can lead to a permanent break down in coordination between groups, even when coordination is attainable and Pareto-efficient. Hence restrictive cultures make coordination with out-group members more difficult. By limiting a person’s options, however, highly restrictive cultures act as a strategic commitment, forcing out-group members to conform to in-group norms if they want to coordinate. In this way, cultural constraints on behaviour may lead to higher expected welfare. When people rationally choose their culture, we demonstrate that restrictive and permissive cultures can co-exist in the long run. |
| Keywords: | Coordination games, Culture, Taboos, Commitments, Cultural Evolution |
| JEL: | C72 C73 Z1 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:489&r=soc |
| By: | Florian Artinger (Max Planck Institute for Human Development, Berlin); Fillipos Exadaktylos (University of Granada); Lauri Sääksvuori (Max Planck Institute of Economics, Jena); Hannes Koppel (Max Planck Institute of Economics, Jena) |
| Abstract: | Economists have been theorizing that other-regarding preferences influence decision making. Yet, what are the corresponding psychological mechanisms that inform these preferences in laboratory games? Empathy and Theory of Mind (ToM) are dispositions considered to be essential in social interaction. We investigate the connection between an individual's preference type and her disposition to engage in empathy and ToM in neutrally framed Dictator and Ultimatum Game. For that purpose, cognitive and emotional psychometric scales are applied to infer the dispositions of each subject. We find that a disposition for empathy does not influence the behavior in the games. ToM positively correlates with offers in the Dictator Game. Integral to ToM are beliefs about others. Both, other-regarding and selfish types, show a strong correlation between what they belief others do and their own action. These results indicate that expectations about the prevalent social norm might be central in informing behavior in one-shot games. |
| Keywords: | Altruism, Inequality, Empathy, Theory of Mind, Behavioral Economics |
| JEL: | C91 C72 D01 D64 |
| Date: | 2010–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-037&r=soc |
| By: | Abitbol, Pablo |
| Abstract: | This report presents the results of a replication, with 199 culturally-diverse subjects, of Thomas Schelling’s (1957) experiments on tacit coordination. Section 1 introduces the concept of focal point equilibrium selection in tacit one-shot symmetric pure coordination games, as presented by Schelling in his classic article; it then traces its subsequent exploration through experimental research, shows how it has been explained, particularly in terms of culture, and relates that kind of explanation to the experimental and null hypotheses of the present study and its associated predictions. Section 2 describes the design of the intercultural tacit coordination experiment, and section 3 the results. Finally, section 4 presents a very preliminary discussion of the implications of the experiment’s results in terms of the cultural explanation of focal point equilibrium selection. |
| Keywords: | Culture; cultural diversity; coordination; game theory; Thomas Schelling |
| JEL: | C72 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23474&r=soc |
| By: | King, Elizabeth M.; Montenegro, Claudio E.; Orazem, Peter |
| Abstract: | T.W. Schultz (1975) proposed that returns to human capital were highest in economic environments where technology, price or production shocks were common and managerial skills to adapt resource allocations to those shocks were most in need. We hypothesize that variation in returns to human capital across developing countries can be explained in part by government institutions that blunt the magnitude of those shocks or that limit individual abilities to respond to those shocks. Using estimated returns to schooling and experience from 122 household surveys from 86 developing countries, we demonstrate a strong positive correlation between economic freedom and returns to human capital. The positive effect is observed at all quantiles of the wage distribution. Economic freedom benefits the most skilled who get higher returns to schooling; but it also benefits the least skilled who get higher returns from experience. |
| Keywords: | Returns to education; Returns to experience; Economic freedom; inequality; quantiles |
| JEL: | J31 O15 P10 |
| Date: | 2010–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:31641&r=soc |
| By: | Iwasaki, Ichiro; Suzuki, Taku |
| Abstract: | This paper examines the determinants of corruption in transition economies.We found that the progress of structural reform, comprising marketization, rule of law, and democratization had a crucial impact on the extent of corruption control in former socialist countries. |
| Keywords: | transition economies, corruption, marketization, rule of law, democratization |
| JEL: | K42 O17 O57 P26 P52 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:a533&r=soc |
| By: | Boyer, Tristan; Jonard, Nicolas |
| Abstract: | In this paper we study the conditions under which efficient behavior can spread from a finite initial seed group to an infinite population living on a network. We formulate conditions on payoffs and network structure under which overall contagion occurs in arbitrary regular networks. Central in this process is the communication pattern among players who are confronted with the same decision, i.e. who are at the same distance from the initial seed group. The extent to which these agents interact among themselves (rather than with players who already have faced or subsequently will face the decision problem) is critical in the Prisoner’s Dilemma. In the Coordination Game the key element is the cohesion of the efficient cluster, a property which is different from the one identified in the Prisoner’s Dilemma. Additional results are obtained when we distinguish the interaction and information neighborhoods. Specifically, we find that contagion tends to be favored by fast neighborhood growth if an assumption of conservative behavior is made. We discuss our findings in relation to the notions of clustering, transitivity and cohesion. |
| Keywords: | imitation; contagion; regular graphs; local interaction game |
| JEL: | D70 C73 C72 |
| Date: | 2010–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23430&r=soc |
| By: | Alfonso Rosa García (Universidad de Murcia); Hubert Janos Kiss (Universidad Autónoma de Madrid); Ismael Rodríguez Lara (Universidad de Alicante) |
| Abstract: | We develop, both theoretically and experimentally, a stereotypical environment that allows for coordination breakdown, leading to a bank run. Three depositors are located at the nodes of a network and have to decide whether to keep their funds deposited or to withdraw. One of the depositors has immediate liquidity needs, whereas the other two depositors do not. Depositors act sequentially and observe others actions only if connected by the network. Theoretically, a link connecting the first two depositors to decide is sufficient to avoid a bank run. However, our experimental evidence shows that subjects¿ choice is not affected by the existence of the link per se. Instead, being observed and the particular action that is observed determine subjects¿ choice. Our results highlight the importance of initial decisions in the emergence of a bank run. In particular, Bayesian analysis reveals that subjects clearly depart from predicted behavior when observing a withdrawal. |
| Keywords: | bank runs, coordination failures, experimental evidence, networks |
| JEL: | C70 C90 D85 G21 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2009-25&r=soc |
| By: | Tsuru, Tsuyoshi; Owan, Hideo; Uehara, Katsuhito |
| Abstract: | Using personnel and transaction data obtained from two auto dealerships located in a large city in Canada, we examine whether same or different ethnic matches between salespersons and customers affect the prices and quantities of transactions. First, compared with White-White matches, we find little evidence of price discrimination for different ethnicity matches (such as White vs. Middle East), and we detect neither premium price setting nor discounting among same ethnicity matches (such as Asian vs. Asian) relative to different ethnicity matches. Regarding quantity, however, sales ratios to ethnically-same customers are substantially higher than is the case for ethnically dissimilar customers. For example, East Asian salespersons concluded more than 30% of their sales with East Asian customers. Moreover, we find that high-performing salespersons skillfully utilize social networks to conclude transactions with customers of the same ethnicity, especially when business conditions are unfavorable. This finding suggests that social networks are important to understanding the nature of auto retail markets. |
| JEL: | M12 M5 J15 J33 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:a529&r=soc |
| By: | Alejandrina Salcedo; Todd Schoellman; Michèle Tertilt |
| Abstract: | The size of the average American household has fallen dramatically -from six in 1850 to three in 2000. To explain this decline we model households as collections of roommates who share the costs of household public goods. If private goods are more income elastic than public goods, as we document in the paper, an increase in income endogenously leads to smaller households. We calibrate the model to match data from 2000. Changing incomes to their 1850 levels, we find that our mechanism can explain 37 percent of the observed reduction in the number of adults per household and 16 percent of the reduction in the number of children. |
| Keywords: | Household size, living arrangements, roommates, economies of scale, household public goods, fertility decline. |
| JEL: | D10 E10 J11 N30 O10 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2010-07&r=soc |