nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2011‒05‒14
nine papers chosen by
Fabio Sabatini

  1. Does a virtuous circle between social capital and CSR exist? A Ònetwork of gamesÓ model and some empirical evidence By Giacomo Degli Antoni; Lorenzo Sacconi
  2. Economic Growth, Technological Progress, and Social Capital: The Inverted U Hypothesis By Angelo Antoci; Fabio Sabatini; Mauro Sodini
  3. Smiling is a Costly Signal of Cooperation Opportunities: Experimental Evidence from a Trust Game By Centorrino, Samuele; Djemaï, Elodie; Hopfensitz, Astrid; Milinski, Manfred; Seabright, Paul
  4. Reshaping Institutions: Evidence on External Aid and Local Collective Action By Katherine Casey; Rachel Glennerster; Edward Miguel
  5. Tullock Challenges: happiness, revolutions and democracy By Bruno S. Frey
  6. The influence of social capital on CEO dismissal in Germany: an empirical analysis By Wrage, Markus; Tuschke, Anja; Bresser, Rudi K. F.
  7. Public Goods Agreements with Other-Regarding Preferences By Charles D. Kolstad
  8. Agency Consequences of Government Funding in Nonprofit Organizations By S. VERBRUGGEN; K. VLASSENROOT; J. CHRISTIAENS
  9. Ethnic networks and trade: Intensive vs. extensive margins By Coughlin, Cletus C; Wall, Howard J.

  1. By: Giacomo Degli Antoni (University of Milano-Bicocca); Lorenzo Sacconi (University of Trento - Department of Economics)
    Abstract: Social capital and corporate social responsibility (CSR) have received increasing attention in research on the role that elements such as trust, trustworthiness and social norms of reciprocity and cooperation may have in promoting socio-economic development. Although social capital and CSR seem to have features in common, their relationship has not yet been analysed in depth. This paper investigates the idea of a virtuous circle between the level of social capital and the implementation of CSR practices that fosters the creation of cooperative networks between the firm and all its stakeholders. By using both a theoretical approach developed by considering tools of network analysis and psychological game theory and an empirical approach based on original evidence from three case studies, this study shows the role that cognitive social capital (understood as a disposition to conform with ethical principles of cooperation) and the adoption of CSR practices may have in promoting the emergence of sustainable networks of relations between the firm and all its stakeholders (structural social capital).
    Keywords: Social capital, Corporate Social Responsibility, Social norms, Network, Cooperation, Trust
    JEL: A13 D23 L21 M14 Z10
    Date: 2011–05
  2. By: Angelo Antoci; Fabio Sabatini; Mauro Sodini
    Abstract: We set up a theoretical framework to analyze the possible role of economic growth and technological progress in the erosion of social capital. Under certain parameters, the relationship between technological progress and social capital can take the shape of an inverted U curve. We show the circumstances allowing the economy to follow trajectories where the stock of social capital grows endogenously and unboundedly.
    Keywords: Economic growth; social capital; social norms; technological progress.
    JEL: O33 Z13
    Date: 2011–04–07
  3. By: Centorrino, Samuele; Djemaï, Elodie; Hopfensitz, Astrid; Milinski, Manfred; Seabright, Paul
    Abstract: We test the hypothesis that "genuine" or "convincing" smiling is a costly signal that has evolved to induce cooperation in situations requiring mutual trust. Potential trustees in a trust game made video clips for viewing by potential trusters before the latter decided whether to send them money. Ratings of the genuineness of smiles vary across clips; it is difficult to make convincing smiles to order. We argue that smiling convincingly is costly, because smiles from trustees playing for higher stakes are rated as significantly more convincing, so that rewards appear to induce effort. We show that it induces cooperation: smiles rated as more convincing strongly predict judgments about the trustworthiness of trustees, and willingness to send them money. Finally, we show that it is a honest signal: those smiling convincingly return more money on average to senders. Convincing smiles are to some extent a signal of the intrinsic character of trustees: less honest individuals find smiling convincingly more difficult. They are also informative about the greater amounts that trustees playing for higher stakes have available to share: it is harder to smile convincingly if you have less to offer.
    Date: 2011–04
  4. By: Katherine Casey; Rachel Glennerster; Edward Miguel
    Abstract: Although institutions are believed to be key determinants of economic performance, there is limited evidence on how they can be successfully reformed. The most popular strategy to improve local institutions in developing countries is “community driven development” (CDD). This paper estimates the impact of a CDD program in post-war Sierra Leone using a randomized experiment and novel outcome measures. We find positive short-run effects on local public goods provision, but no sustained impacts on fund-raising, decision-making processes, or the involvement of marginalized groups (like women) in local affairs, indicating that CDD was ineffective at durably reshaping local institutions.
    JEL: F35 H41 O4
    Date: 2011–05
  5. By: Bruno S. Frey
    Abstract: Gordon Tullock has been one of the most important founders and contributors to Public Choice. Two innovations are typical “Tullock Challenges”. The first relates to method: the measurement of subjective well-being, or happiness. The second relates to digital social networks such as Facebook, Twitter, or to some extent Google. Both innovations lead to strong incentives by the governments to manipulate the policy consequences. In general “What is important, will be manipulated by the government”. To restrain government manipulation one has to turn to Constitutional Economics and increase the possibilities for direct popular participation and federalism, or introduce random mechanisms.
    Keywords: Happiness, social networks, constitutional economics, random mechanisms, public choice
    JEL: D72 H10 I31 P16 D02
    Date: 2011–04
  6. By: Wrage, Markus; Tuschke, Anja; Bresser, Rudi K. F.
    Abstract: In this study, we address the question of why some CEOs stay in office during a performance downturn while others don't. Based on a social capital perspective we assume that (1) the social capital endowment of an underperforming CEO may reduce the risk of getting dismissed and that (2) the tendency of board members to dismiss the CEO is moderated by their own social capital. Using data of large German corporations, we find support for our assumptions regarding the influence of a CEO's social capital on the risk of getting dismissed. We find partial evidence for a moderating effect of the social capital of board members. Our findings' implications for the literatures on social capital and CEO turnover are discussed. --
    Keywords: CEO turnover,board interlocks,social capital
    Date: 2011
  7. By: Charles D. Kolstad
    Abstract: Why cooperation occurs when noncooperation appears to be individually rational has been an issue in economics for at least a half century. In the 1960’s and 1970’s the context was cooperation in the prisoner’s dilemma game; in the 1980’s concern shifted to voluntary provision of public goods; in the 1990’s, the literature on coalition formation for public goods provision emerged, in the context of coalitions to provide transboundary pollution abatement. The problem is that theory suggests fairly low (even zero) levels of contributions to the public good and high levels of free riding. Experiments and empirical evidence suggests higher levels of cooperation. This is a major reason for the emergence in the 1990’s and more recently of the literature on other-regarding preferences (also known as social preferences). Such preferences tend to involve higher levels of cooperation (though not always). This paper contributes to the literature on coalitions, public good provision and other-regarding preferences. For standard preferences, the marginal per capita return (MPCR) to investing in the public good must be greater than one for contributing to be individually rational. We find that Charness-Rabin preferences tend to reduce this threshold for individual contributions. We also find that Charness-Rabin preferences reduce the equilibrium size of a coalition of agents formed to provide the public good. In addition to theoretical results, some experimental implications of the theoretical model are provided. In contrast to much of the literature, we treat the wealth of agents as heterogeneous.
    JEL: H4 H41 Q5
    Date: 2011–05
    Abstract: Nonprofit organizations often rely on governmental grants to finance their social programs. Under certain circumstances, the procurement of these grants causes an agency-relation between the board of directors and the management of the organization. Using archival data from a substantial number of nonprofit organizations’ financial statements, the influence of different types of government grants on the agency-relation between board and management is tested. The study reveals an increase in the agency-relationship depending on the level of efforts necessary to achieve the grants.
    Date: 2011–02
  9. By: Coughlin, Cletus C; Wall, Howard J.
    Abstract: Ethnic networks—as proxies for information networks—have been associated with higher levels of international trade. Previous research has not differentiated between the roles of these networks on the extensive and intensive margins. The present paper does so using a model with fixed effects, finding that ethnic networks increase trade on the intensive margin but not on the extensive margin.
    Keywords: Ethnic Networks; State Exports; Intensive Margin; Extensive Margin
    JEL: R10 F10
    Date: 2011–01–13

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