nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2011‒11‒21
ten papers chosen by
Fabio Sabatini

  1. Groups and information disclosure: Olson and Putnam Hypotheses. By Yamamura, Eiji
  2. Social Participation and Hours Worked By Stefano Bartolini; Ennio Bilancini
  3. Happy for How Long? How Social Capital and GDP relate to Happiness over Time By Stefano Bartolini; Francesco Sarracino
  4. Corruption, growth and ethnic fractionalization: a theoretical model By Roy Cerqueti; Raffaella Coppier; Gustavo Piga
  5. Economic incentives and social preferences: substitutes or complements? By Samuel Bowles; Sandra Polania-Reyes
  6. Job search via social networks : An analysis of monetary and non-monetary returns for low-skilled unemployed By Krug, Gerhard; Rebien, Martina
  7. Financial Investments, Information Flows, and Caste Affiliation - Empirical Evidence from India By Werner Boente; Ute Filipiak
  8. Networks and the disappearance of the intranational home bias By Aitor Garmendia; Carlos Llano; Asier Minondo; Francisco Requena
  9. No place to hide: When shame causes proselfs to cooperate By Declerck C.H.; Boone Ch.; Kiyonari T.
  10. A model of influence based on aggregation functions By Michel Grabisch; Agnieszka Rusinowska

  1. By: Yamamura, Eiji
    Abstract: There is controversy between Putnam and Olson concerning the role of groups. Putnam argued that small groups contribute to economic growth, whereas Olson asserted that small groups hamper economic growth through rent-seeking behavior. Since the end of the 1990s in Japan, there has been a remarkable rise in the rate of enactment of public information-disclosure ordinances by local governments. This paper uses the panel data of Japan to compare the effects of Putnam-type horizontally structured groups and Olson-type vertically structured groups on government information disclosures. The Arellano-Bond type dynamic panel model is employed to control for unobserved fixed effects and endogeneity bias. The major findings are as follows: (1) the Putnam-type group has a positive influence on information disclosure; (2) the Olson-type group has a detrimental effect on information disclosure. These findings support both the Putnam and Olson hypotheses. The characteristics of a particular group should be considered carefully when the influence of that group is examined.
    Keywords: Putnam; Olson; interest group; social capital; information-disclosure ordinance
    JEL: G38 P48 Z13
    Date: 2011–11–01
  2. By: Stefano Bartolini; Ennio Bilancini
    Abstract: We investigate the relationship between social participation and the hours worked in the market. Social participation is the component of social capital that measures individuals’ engament in groups, associations and non-governmental organizations. We provide a model of consumer choice where social participation may be either a substitute or a complement to material consumption – depending on whether participation is instrumentally or non-instrumentally motivated – and where a local environment with greater social participation increases the return to individual participation. We carry out an empirical investigation of this framework using survey data on United States for the period 1972-2004. We find that non-instrumental social participation substantially decreases the hours worked, while instrumental social participation substantially increases them. Moreover, evidence is consistent with the idea that a local environment with greater social participation fosters individual social participation.
    Keywords: social participation, relational goods, social capital, work hours, instrumental and non-instrumental motivations
    JEL: A13 D62 J22 Z13
    Date: 2011–10
  3. By: Stefano Bartolini; Francesco Sarracino
    Abstract: What does predict the evolution over time of subjective well-being? We answer this question correlating cross country time series of subjective well-being with the time series of social capital and/or GDP. First, we adopt a bivariate methodology similar to the one used used by Stevenson and Wolfers (2008), Sacks et al. (2010), Easterlin and Angelescu (2009), Easterlin et al. (2010). We find that in the long (at least 15 years) and medium run (6 years) social capital is a powerful predictor of the evolution of subjective well-being. In the short-term (2 years) this relationship weakens. Indeed, short run changes in social capital predict a much smaller portion of the changes in subjective well-being, compared to longer periods. GDP follows a reverse path: in the short run it is more positively correlated to the changes in well-being than in the medium-term, while in the long run the correlation vanishes. Secondly, we run trivariate regressions of time series of subjective well-being on time series of both social capital and GDP, which confirm the results from bivariate analysis.
    Keywords: Easterlin paradox; GDP; economic growth; subjective well-being; happiness; life satisfaction; social capital; time-series; short run; medium run; long run; WVS; EVS; ESS; time-series.
    JEL: D60 I31 O10
    Date: 2011–10
  4. By: Roy Cerqueti (University of Macerata); Raffaella Coppier (University of Macerata); Gustavo Piga (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: This paper analyzes the existing relationship between ethnic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a nonlinear relationship between fractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a check and balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries.
    Keywords: corruption, ethnic fractionalization, monitoring cost, economic growth.
    JEL: D73 K42 O43
    Date: 2011–11–08
  5. By: Samuel Bowles; Sandra Polania-Reyes
    Abstract: Explicit economic incentives designed to increase contributions to public goods and to promote other pro-social behavior sometimes are counterproductive or less effective than would be predicted among entirely self-interested individuals. This may occur when incentives adversely affect individuals’ altruism, ethical norms, intrinsic motives to serve the public, and other social preferences. In the 50 experimental studies that we survey these effects are common, so that incentives and social preferences may be either substitutes (crowding out) or complements. We provide evidence for four mechanisms that may account for these incentive effects on preferences, based on the fact that incentives may (i) provide information about the person who implemented the incentive, (ii) frame the decision situation so as to suggest appropriate behavior, (iii) compromise a control averse individual’s sense of autonomy and (iv) affect the process by which people learn new preferences. An implication of the fact that incentives affect preferences is that the evaluation of public policy must be restricted to allocations that are supportable as Nash equilibria when account is taken of these crowding effects. We show that well designed fines, subsidies and the like minimize crowding out and may even do the opposite, making incentives and social preferences complements rather than substitutes
    Keywords: Public goods, behavioral experiments, social preferences, endogenous preferences, motivational crowding, explicit incentive
    JEL: A13 C90 D02 D63 D64 H41 D78 E61 Z13
    Date: 2011–10
  6. By: Krug, Gerhard (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Rebien, Martina (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Using a search theoretical model, we analyse the effects of the information flow via social networks (friends, relatives and other personal contacts) by comparing monetary and non-monetary outcomes in obtaining jobs via networks versus formal methods. Propensity-score matching on survey data from the low-skilled unemployed is used to identify causal effects. The analysis takes into account unobserved heterogeneity by applying Rosenbaum bounds. Because of the potential ambiguity when comparing outcomes in accepted jobs, we also examine the effectiveness of job searches using social networks as a source of information compared to not using networks. We find no evidence for causal effects on monetary outcomes and, at best, only weak evidence for effects on non-monetary job outcomes." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitsuche, soziales Netzwerk, Niedrigqualifizierte, Arbeitslose, Langzeitarbeitslose, Arbeitsplatzsuchtheorie
    JEL: J64 J31
    Date: 2011–11–16
  7. By: Werner Boente (Schumpeter School of Business and Economics University of Wuppertal); Ute Filipiak (Schumpeter School of Business and Economics University of Wuppertal)
    Abstract: This paper empirically investigates the relevance of social interaction and caste affiliation for individual awareness of financial instruments and investment behavior in India. The results of our empirical analysis, which is based on a large scale survey on saving patterns of Indians, suggest a positive relationship between financial knowledge and social interaction. However, especially backward caste people living in regions with a large fraction of backward castes have a lower probability of being aware of various financial instruments. In contrast, we find only weak empirical evidence for a direct effect of caste affiliation and social interaction on investment behavior.
    Keywords: Financial Literacy, Social Interaction, Social Networks, Indian Caste System
    JEL: G11 G14 R2 Z1
    Date: 2011–10
  8. By: Aitor Garmendia (Deusto Business School); Carlos Llano (Universidad Autónoma de Madrid); Asier Minondo (Deusto Business School); Francisco Requena (Universidad de Valencia)
    Abstract: Previous studies have shown that, not only countries, but also regions have a preference to trade within their administrative borders. Using unique trade flows data, we also find a large home bias in Spanish intranational trade. However, we show that this home bias disappears once we take into account the higher density of social and business networks within regions than between regions. We also find that the home bias does not disappear if intranational trade flows are measured in quantity rather than value. This fact might explain why previous studies on other European countries still find an intranational home bias, even when network effects are taken into account.
    Keywords: home bias, state borders, intranational trade, networks, business groups, Spain
    JEL: F12 F15
    Date: 2011–11
  9. By: Declerck C.H.; Boone Ch.; Kiyonari T.
    Abstract: Shame is often considered a moral emotion with action tendencies shaped by natural selection to elicit socially beneficial behavior. Yet, unlike guilt or other social emotions, prior experimental studies do not indicate that incidental shame boosts prosocial behavior. Based on the affect as information theory, we hypothesize that incidental feelings of shame increase cooperative behavior, but only for self-interested individuals, and only in situations where shame is relevant with regards to its action tendency of avoiding reputation losses. To test this hypothesis, cooperation levels are compared between a classic prisoner’s dilemma (where “defect” may result from multiple motives) and a sequential prisoner’s dilemma (where “defect” is the result of intentional greediness). The results indicate that, as hypothesized, proself individuals cooperate more following incidental shame, but only in a sequential prisoner’s dilemma. Hence ashamed proselfs become inclined to cooperate when they believe they have no way to hide their greediness, and not necessarily because they want to make up for earlier wrong-doing.
    Date: 2011–11
  10. By: Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: The paper concerns a dynamic model of influence in which agents have to make a yes-no decision. Each agent has an initial opinion, which he may change during different phases of interaction, due to mutual influence among agents. The influence mechanism is assumed to be stochastic and to follow a Markov chain. In the paper, we investigate a model of influence based on aggregation functions. Each agent modifies his opinion independently of the others, by aggregating the current opinion of all agents, possibly including himself. We provide a general analysis of convergence in the aggregation model and give more practical conditions based on influential players. We show that the process of influence converges always to one of the two consensus states, and there may exist other terminal classes, which are either cyclic or union of Boolean lattices. We give sufficient conditions for avoiding these additional terminal classes, based on properties of the graph of influence and influential players. We also introduce the notion of influential coalition and show that it can fully describe terminal classes. Some important families of aggregation functions are discussed.
    Keywords: Influence, aggregation function, convergence, terminal class, influential coalition, social network.
    Date: 2011–10

This nep-soc issue is ©2011 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.