nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2010‒11‒27
eighteen papers chosen by
Fabio Sabatini

  1. Trust, Confidence and Economic Growth An Evaluation of the Beugelsdijk Hypothesis By Benjamin Volland
  2. Charity as a Signal of Trustworthiness By Fehrler, Sebastian
  3. An exploratory analysis of the relationship between social interactions, income and health in Italy By Fiorillo, Damiano; Sabatini, Fabio
  4. Cooperation, the power of a single word. Some experimental evidence on wording and gender effects in a Game of Chicken. By Marie-Laure Cabon-Dhersin; Nathalie Etchart-Vincent
  5. Iterating influence between players in a social network. By Michel Grabisch; Agnieszka Rusinowska
  6. Social Ties and the Job Search of Recent Immigrants By Deepti Goel; Kevin Lang
  7. Social Identity and Inequality--The Impact of China’s Hukou System By Farzana Afridi; Sherry Xin Li; Yufei Ren
  8. Chinese networks and tariff evasion By Pierre-Louis Vézina; Lorenzo Rotunno
  9. Social Responsibility of Indian Microfinance: A Critical Review By Tara S Nair; Jan Postmus; Rachayeeta Pradhan
  10. A wiki for social workers in a local health authority: An actor-network analysis and seed design By Marisa Ponti; Stefano Renzi; Jane Klobas
  11. Corruption and Sustainable Development By Aidt, T.S.
  12. Why Are East Germans Not More Mobile?: Analyzing the Impact of Local Networks on Migration Intentions By Peter Boenisch; Lutz Schneider
  13. Network Architecture and Mutual Monitoring in Public Goods Experiments By Carpenter, Jeffrey P.; Kariv, Shachar; Schotter, Andrew
  14. Ising-like agent-based technology diffusion model: adoption patterns vs. seeding strategies By Carlos E. Laciana; Santiago L. Rovere
  16. Random–Walk–Based Segregation Measures By Marc Vorsatz; Pablo Coralio Ballester
  17. Risk Aversion and the Effect of Family Background on Student Effort By Pedro Landeras
  18. Business Ethics: Some Theoretical Issues By Lluka, Valon

  1. By: Benjamin Volland (Max Planck Institute of Economics, Jena, Germany)
    Abstract: This paper analyses the hypothesis that the robust relationship between trust - as measured by the World Values Survey's question "In general, do you think that most people can be trusted, or that you can't be too careful in dealing with people?" - and economic growth, established by empirical macroeconomic growth literature (Knack & Keefer, 1997; Zak & Knack, 2001; Beugelsdijk, de Groot, & van Schaik, 2004; Dearmon & Grier, 2009) in fact captures the well-functioning of institutions. Our results reveal that the correlation between trust and economic growth is robust in terms of statistical significance and sign of the estimated coefficient, when controling for the respondents' perceived well-functioning of institutions. While underlining the existing empirical evidence that trust matters in explaining differences in economic performance, our results also show that this influence is largely independent of institutional well-functioning.
    Keywords: Trust, Institutions, Economic growth
    JEL: B40 O11 Z13
    Date: 2010–11–15
  2. By: Fehrler, Sebastian (University of Zurich)
    Abstract: Being perceived as trustworthy comes with substantial economic benefits in many situations. Making other people think you are a trustworthy person may, therefore, be an important motive for charity and other forms of prosocial behavior, provided these activities work as signals of trustworthiness. This paper shows that donating money to an NGO substantially raises the other players' beliefs about the donors’ trustworthiness in a simple trust game. Consequently, donors receive higher transfers. The magnitude of these benefits is substantial.
    Keywords: charity, signaling, trust, trustworthiness
    JEL: C72 C92 H41
    Date: 2010–11
  3. By: Fiorillo, Damiano; Sabatini, Fabio
    Abstract: This paper carries out a preliminary and exploratory investigation into the effect of various types of social interaction on health in Italy. After controlling for household income, education, work status and a number of socio-demographic variables, we find that the frequency of meetings with friends is significantly and positively associated with self-perceived health. The frequency of visits with relatives has a significant, but weaker effect. Membership in voluntary organizations is a significant and weakly negative predictor of good health. Other relevant explanatory variables are education and work status.
    Keywords: Statistical matching; income; wealth; well-being; social interactions; social capital; health; Italy.
    JEL: I12 Z13
    Date: 2010–11–15
  4. By: Marie-Laure Cabon-Dhersin (Centre d'Economie de la Sorbonne - Paris School of Economics & Ecole normale supérieure de Cachan); Nathalie Etchart-Vincent (Centre d'Economie de la Sorbonne - Paris School of Economics & Ecole normale supérieure de Cachan)
    Abstract: Wording has been widely shown to affect decision making. In this paper, we investigate experimentally whether and to what extent, cooperative behaviour in a Game of Chicken may be impated by a very basic change in the labelling of the strategies. Our within-subject experimental design involves two treatments. The only difference between them is that we introduce either a socially-oriented wording ("I cooperate"/"I do not cooperate") or colours (red/blue) to designate strategies. The level of cooperation appears to be higher in the socially-oriented context, but only when the uncertainty as regards the type of the partner is manipulated, and especially among females.
    Keywords: Social dilemma, Game of Chicken, cooperation, wording effects, gender effects.
    JEL: C72 C92
    Date: 2010–09
  5. By: Michel Grabisch (Centre d'Economie de la Sorbonne - Paris School of Economics); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: We generalize a yes-no model of influence in a social network with a single step of mutual influence to a framework with iterated influence. Each agent makes an acceptance- rejection decision and has an inclination to say either ‘yes’ or ‘no’. Due to influence by others, an agent's decision may be different from his original inclination. Such a transformation from the inclinations to the decisions is represented by an influence function. We analyze the decision process in which the mutual influence does not stop after one step but iterates. Any classical influence function can be coded by a stochastic matrix, and a generalization leads to stochastic influence functions. We apply Markov chains theory to the analysis of stochastic binary influence functions. We deliver a general analysis of the convergence of an influence function and then study the convergence of particular influence functions. This model is compared with the Asavathiratham model of influence. We also investigate models based on aggregation functions. In this context, we give a complete description of terminal classes, and show that the only terminal states are the consensus states if all players are weakly essential.
    Keywords: Social network, influence, stochastic influence function, convergence, terminal class, Markov chains, aggregation function.
    JEL: C7 D7
    Date: 2010–11
  6. By: Deepti Goel (Department of Economics, Delhi School of Economics, Delhi, India); Kevin Lang (Boston University and NBER, IZA)
    Abstract: We show that increasing the probability of obtaining a job offer through the network should raise the observed mean wage in jobs found through formal (non-network) channels relative to that in jobs found through the network. This prediction also holds at all percentiles of the observed wage distribution, except the highest and lowest. The largest changes are likely to occur below the median. We test and conrm these implications using a survey of recent immigrants to Canada. We also develop a simple structural model, consistent with the theoretical model, and show that it can replicate the broad patterns in the data. For recent immigrants, our results are consistent with the primary effect of strong networks being to increase the arrival rate of offers rather than to alter the distribution from which offers are drawn.
    Date: 2010–09
  7. By: Farzana Afridi (Department of Economics, Delhi School of Economics, Delhi, India); Sherry Xin Li (School of Economic, Political and Policy Sciences (EPPS) University of Texas at Dallas, GR31); Yufei Ren (School of Economic, Political and Policy Sciences (EPPS) University of Texas at Dallas, GR31)
    Abstract: We conduct an experimental study to investigate the causal impact of social identity on individuals? response to economic incentives. We focus on China?s decades old household registration system, or the hukou institution, which categorizes citizens into urban and rural residents, and favors the former over the latter in resource allocation. Our results indicate that making individuals? hukou status salient and public significantly reduces the performance of rural migrant students on an incentivized cognitive task by 10 percent. This leads to a leftward shift of their earnings distribution – the proportion of rural migrants below the 25th earnings percentile increases significantly by almost 19 percentage points. However, among non-migrants the proportion with earnings below the 25th percentile drops by 5 percentage points, and the proportion above the 75th percentile increases by almost 8 percentage points, albeit insignificantly. The results demonstrate the impact of institutionally imposed social identity on individuals? intrinsic response to incentives, and consequently on widening income inequality.
    Keywords: social identity, hukou, inequality, field experiment, China
    JEL: C93 O15 P36
    Date: 2010–10
  8. By: Pierre-Louis Vézina; Lorenzo Rotunno (IHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: In this paper we combine the tariff evasion analysis of Fisman and Wei (2004) with Rauch and Trindade’s (2002) study of Chinese trade networks. Chinese networks are known to act as trade catalysts by enforcing contracts and providing market information. As tariff evasion occurs outside the law, market information is scant and formal institutions inexistent, rendering networks the more important. We find robust evidence that Chinese networks, proxied by ethnic Chinese migrant populations, increase tariff evasion, i.e. the tariff semi-elasticity of Chinese missing imports. We suggest the effects takes place through matching of illicit-minded traders, identification of corrupt customs agents and enforcement of informal contracts.
    Keywords: tariff evasion, China, illicit trade, migrant networks
    JEL: F1 K42
    Date: 2010–11
  9. By: Tara S Nair; Jan Postmus; Rachayeeta Pradhan
    Abstract: This paper discusses the issue of social responsibility of Indian microfinance using two theoretical streams from business social responsibility research – stakeholder theory and social contract theory.
    Keywords: Microfinance, India, self help group, social responsibility, social contract, stakeholder, pro-poor, SHGs,
    Date: 2010
  10. By: Marisa Ponti; Stefano Renzi; Jane Klobas
    Abstract: We use actor-network theory (ANT) to understand how social workers in a large Italian local health authority might interact with a wiki space to share resources, inform practice, and maintain their professional identity. At the time of study, the wiki was proposed as a replacement technology for an existing structured knowledge management system (KMS). We introduce the case organization, the social workers and the problem and then describe the key concepts of ANT and how they can be used to guide socio-technical analysis of the potential for a proposed new information technology. ANT was applied in two ways. Firstly, we analyzed how the social workers’ existing KMS came about, using the processes of translation as defined in ANT to reconstruct the events leading to that choice and the subsequent idea of replacing the KMS with a wiki. We then used a due process model and drew the actor-network in order to consider the wiki as a potential replacement for the existing KMS. As part of this process, we present the design of a seed structure and participation process for a wiki that would both maintain the value of KMS work done to date and meet additional needs for informal learning and maintenance of professional identity among the social workers. The successful adoption and sustainability of the wiki will depend on strengthening its association with the other stakeholders participating in the project.
    Keywords: wiki, social workers, health sector, actor-network theory, Italy, seed design
    Date: 2010–11
  11. By: Aidt, T.S.
    Abstract: This paper studies the relationship between corruption and sustainable development in a sample of 110 countries between 1996 and 2007. Sustainability is measured by growth in genuine wealth per capita. The empirical analysis consistently finds that cross-national measures of perceived and experienced corruption reduce growth in genuine wealth per capita. In contrast to the evidence on the relationship between corruption and growth in GDP per capita, the negative correlation between a wide range of different corruption indices and growth in genuine wealth per capita is very robust and is of economic as well as of statistical significance. We relate the finding to the literature on the resource curse and demonstrate that rampant corruption can put an economy on an unsustainable path along which its capital base is being eroded.
    Keywords: Corruption, sustainable development, resource curse, cross-country analysis
    JEL: D72 D78
    Date: 2010–11–16
  12. By: Peter Boenisch; Lutz Schneider
    Abstract: Despite poor regional labour market conditions East Germans exhibit a rather limited willing-ness of leaving their home region. Applying an IV ordered probit approach and using the German Socio Economic Panel (SOEP), we test a local network explanation of lower spatial mobility. Firstly, we find that membership in locally bounded social networks reduces regional mobility. Secondly, we show that native East Germans are more invested in this type of social networks than West Germans. Thirdly, after controlling for the social network effect the mobility gap between East and West substantially reduces. Thus, low regional labour mobility of East Germans is for a significant part attributable to local ties binding people to their home region.
    Keywords: Social networks, labour mobility
    JEL: Z13 R23 J61
    Date: 2010
  13. By: Carpenter, Jeffrey P. (Middlebury College); Kariv, Shachar (University of California, Berkeley); Schotter, Andrew (New York University)
    Abstract: Recent experiments show that public goods can be provided at high levels when mutual monitoring and costly punishment are allowed. All these experiments, however, study monitoring and punishment in a setting where all agents can monitor and punish each other (i.e., in a complete network). The architecture of social networks becomes important when individuals can only monitor and punish the other individuals to whom they are connected by the network. We study several non-trivial network architectures that give rise to their own distinctive patterns of behavior. Nevertheless, a number of simple, yet fundamental, properties in graph theory allow us to interpret the variation in the patterns of behavior that arise in the laboratory and to explain the impact of network architecture on the efficiency and dynamics of the experimental outcomes.
    Keywords: experiment, networks, public good, monitoring, punishment
    JEL: D82 D83 C92
    Date: 2010–11
  14. By: Carlos E. Laciana; Santiago L. Rovere
    Abstract: The well-known Ising model used in statistical physics was adapted to a social dynamics context to simulate the adoption of a technological innovation. The model explicitly combines (a) an individual's perception of the advantages of an innovation and (b) social influence from members of the decision-maker's social network. The micro-level adoption dynamics are embedded into an agent-based model that allows exploration of macro-level patterns of technology diffusion throughout systems with different configurations (number and distributions of early adopters, social network topologies). In the present work we carry out many numerical simulations. We find that when the gap between the individual's perception of the options is high, the adoption speed increases if the dispersion of early adopters grows. Another test was based on changing the network topology by means of stochastic connections to a common opinion reference (hub), which resulted in an increment in the adoption speed. Finally, we performed a simulation of competition between options for both regular and small world networks.
    Date: 2010–11
  15. By: Lacetera, Nicola; Macis, Mario; Slonim, Robert
    Abstract: We present evidence from observational data on nearly 14,000 American Red Cross blood drives and from a randomized natural field experiment showing that economic incentives have a positive effect on blood donations without increasing the fraction of donors who come to a drive but are ineligible to donate. We also show that the effect of incentives on donations increases with the incentive's economic value. However, we further show that a substantial proportion of the increase in donations due to incentives may be explained by donors leaving neighboring drives without incentives to attend the drive with incentives, and the likelihood of this substitution is higher the higher the monetary value of the incentive offered. We conclude that extrinsic incentives stimulate pro-social behavior, but, unless substitution effects are also considered, the effect of incentives may be overesti mated.
    Date: 2010–10
  16. By: Marc Vorsatz; Pablo Coralio Ballester
    Abstract: In this paper, we propose an intuitive way of how to measure residential segregation. Individuals are located in different nodes on a network that are interconnected through links. Each period, an individual either advances to an adjacent node or she stops moving. In this setting, the segregation index is then defined as the probability that a randomly chosen individual meets an individual of the same social group in the neighborhood where her random-walk terminates. It is shown in a dual theorem that the segregation index is as a natural generalization of the isolation index to networks and that it is proportional to the PageRank index applied by Google in order to determine the importance of web-pages. Finally, the segregation index is applied to the Spanish 2009 census tract data and compared with other prominent measures.
    Date: 2010–11
  17. By: Pedro Landeras
    Abstract: In this paper, we propose an intuitive way of how to measure residential segregation. Individuals are located in different nodes on a network that are interconnected through links. Each period, an individual either advances to an adjacent node or she stops moving. In this setting, the segregation index is then defined as the probability that a randomly chosen individual meets an individual of the same social group in the neighborhood where her random-walk terminates. It is shown in a dual theorem that the segregation index is as a natural generalization of the isolation index to networks and that it is proportional to the PageRank index applied by Google in order to determine the importance of web-pages. Finally, the segregation index is applied to the Spanish 2009 census tract data and compared with other prominent measures.
    Date: 2010–11
  18. By: Lluka, Valon
    Abstract: Ethics can be defined as a process of evaluating actions according to moral principal of values. Throughout the centuries people were trying to choose between profit and moral. Perhaps, some of them obtain both, but every time it could have roused ethical issues. Those issues concern fairness, justice, rightness or wrongness; as a result it can only be resolved according to ethical standards. Setting the ethical standards for the way of doing business in corporation is primarily task of management. Corporations have to maintain the same standards as an individual person and, in addition, corporations, as organizational units, have their own social responsibilities toward customers, employees and society. However, any business should keep its original purpose of functioning - making profit. Balancing the traditional standards of profitability and burden of social responsibilities is not an easy task. In recent years it has been a trend of setting standards of corporate ethics according to high degree of morale. The central inquiry in this paper is to determine what difference it makes if businesses in a community act ethically or ignore ethics. Since business is the subject, our inquiry centers on money – a value highly appreciated in the U.S., as well as in varying degrees in other countries; ethics is often ignored when faced with the possibility of earning or acquiring large sums of money. The purpose of this paper is to examine ethics and the various ethical problems which business faces in the hope of increasing our understanding. To the extent knowledge is increased, if it appears that more ethical conduct is desirable, we will consider ways to develop more ethical conduct in business.
    Keywords: Business ethics; profit; moral values; social responsibility; ethical issues; ethical standards; fairness; justice; rightness; wrongness
    JEL: M14 Q50 M1 M10
    Date: 2010–08–03

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