nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2012‒03‒21
fifteen papers chosen by
Fabio Sabatini

  1. You Can Pick Your Friends, But You Need to Watch Them: Loan Screening and Enforcement in a Referrals Field Experiment By Gharad Bryan; Dean Karlan; Jonathan Zinman
  2. Hey Look at Me: The Effect of Giving Circles on Giving By Dean Karlan; Margaret A. McConnell
  3. Social capital and inequality in Italy By Guido de Blasio; Giorgio Nuzzo
  4. Does fertility behavior spread among friends? By Nicoletta Balbo; Nicola Barban
  5. Cultural Diversity, Cooperation, and Antisocial Punishment By Marco Faillo; Daniela Grieco; Luca Zarri
  6. Household Finances and Social Interaction By Sarah Brown; Karl Taylor
  7. Money is an Experience Good: Competition and Trust in the Private Provision of Money By Ramon Marimon; Juan Pablo Nicolini; Pedro Teles
  8. Decentralization, Social Networks, and Organizational Learning By Emily Erikson; Sampsa Samila
  9. Testing a forgotten aspect of Akerlof’s gift exchange hypothesis: Relational contracts with individual and uniform wages By Kocher, Martin G.; Luhan, Wolfgang J.; Sutter, Matthias
  10. Towards an understanding of the endogenous nature of group identification in games By Smith, John; Bezrukova, Katerina
  11. An experiment investigating the spill-over effects of voicing outrage By Anastasios Koukoumelis; M. Vittoria Levati
  12. Mechanism design and intentions By Felix Bierbrauer; Nick Netzer
  13. Kantian Optimization, Social Ethos, and Pareto Efficiency By John E. Roemer
  14. Experimental Evidence of Self-Image Concerns as Motivation for Giving By Tonin, Mirco; Vlassopoulos, Michael
  15. Is Religiosity of Immigrants a Bridge or a Buffer in the Process of Integration? A Comparative Study of Europe and the United States By García Muñoz, Teresa; Neuman, Shoshana

  1. By: Gharad Bryan (London School of Economics); Dean Karlan (Economic Growth Center, Yale University); Jonathan Zinman (Dartmouth College)
    Abstract: We examine a randomized trial that allows separate identification of peer screening and enforcement of credit contracts. A South African microlender offered half its clients a bonus for referring a friend who repaid a loan. For the remaining clients, the bonus was conditional on loan approval. After approval, the repayment incentive was removed from half the referrers in the first group and added for half those in the second. We find large enforcement effects, a $12 (100 Rand) incentive reduced default by 10 percentage points from a base of 20%. In contrast, we find no evidence of screening.
    Keywords: Information asymmetries; credit market failures; peer networks; social capital; social networks
    JEL: C93 D12 D14 D82 O12 O16
    Date: 2012–01
  2. By: Dean Karlan (Economic Growth Center, Yale University); Margaret A. McConnell (Harvard School of Public Health)
    Abstract: Theories abound for why individuals give to charity. We conduct a field experiment with donors to a Yale University service club to test the impact of a promise of public recognition on giving. Some may claim that they respond to an offer of public recognition not to improve their social standing, but rather to motivate others to give. To tease apart these two theories,we conduct a laboratory experiment with undergraduates, and found no evidence to support the alternative, altruistic motivation. We conclude that charitable gifts increase in response to the promise of public recognition primarily because of individuals' desire to improve their social image.
    Keywords: endowments, prosocial behavior, experiments, voluntary contributions, social image
    JEL: D64 C90 L30
    Date: 2012–01
  3. By: Guido de Blasio (Banca d'Italia); Giorgio Nuzzo (Banca d'Italia)
    Abstract: In the last two decades the socio-economic literature has highlighted the importance of social capital (an ample set of social relations and cultural attitudes) for economic growth and the wellbeing of citizens. The literature broadly suggests a negative correlation between social capital and inequality. This chapter provides some empirical findings on Italy that confirm this.. It also argues that the negative correlation might reflect, on the one hand, the effect of local endowments of social capital on individuals’ lives (such as educational opportunities or female participation in labour markets); it could also reflect the contrary i.e. the effect of greater equality on the social behaviour of residents.
    Keywords: social capital, inequality
    JEL: O15 O43
    Date: 2012–02
  4. By: Nicoletta Balbo; Nicola Barban
    Abstract: This paper investigates how social interactions among friends shape fertility. We specifically examine whether and how friends’ fertility behaviour affects an individual’s transition to parenthood. By integrating insights from economic and sociological theories, we elaborate on the mechanisms via which interactions among friends might affect an individual’s risk of becoming a parent. By exploiting the survey design of the Add Health data, we follow a strategy that allows us to properly identify interaction effects and distinguish them from selection and contextual effects. We engage in a series of discrete time event history models with random effect at the dyadic level. Results show that, net of confounding effects, a friend’s childbearing increases an individual’s risk of becoming a parent. We find a short-term, curvilinear effect: an individual’s risk of childbearing starts increasing after a friend’s childbearing, it reaches its peak around two years later, and then decreases.
    Keywords: transition to parenthood; add-health; social interaction; peer effect
    Date: 2012–02
  5. By: Marco Faillo (Department of Economics, University of Trento); Daniela Grieco (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona))
    Abstract: Is culture an important variable to explain whether groups can successfully provide public goods? A wealth of empirical evidence on both industrialized and developing countries shows that cooperation levels decrease in the presence of ethnic divisions. Although several laboratory works deal with cultural differences, so far most studies restrict their attention to cross-cultural comparisons among internally homogeneous societies. We depart from these contributions and conduct an intercultural public goods game with punishment experiment in Italy, a country where immigration is a quite recent, but politically hot phenomenon. We investigate the effects of introducing a varying number of foreign participants within a homogeneous pool of native subjects. Our results indicate that foreigners contribute significantly less than natives, natives react lowering their own contribution levels, and, consequently, the degree of cultural diversity negatively affects the overall level of cooperation. In terms of sanctioning, we observe no difference in the overall amount of assigned and received punishment points; however, behaving mostly as free-riders, foreigners are more likely to use anti-social punishment. In the absence of institutional restrictions ruling out anti-social punishment, this might amplify the documented detrimental effect on cooperation.
    Keywords: Experimental Economics; Public Good Games; Cooperation; Cultural Diversity; Anti-social Punishment.
    JEL: C72 C91 C92 D64 D71
    Date: 2012–03
  6. By: Sarah Brown (Department of Economics, The University of Sheffield); Karl Taylor (Department of Economics, The University of Sheffield)
    Abstract: In this paper, we investigate the relationship between social interaction and household finances using data from the British Household Panel Survey. We explore how social interaction influences the probability of holding different types of unsecured debt and assets, as well as how social interaction influences the levels of unsecured debt, financial assets and net worth held. Our findings suggest that social interaction has a positive influence upon the types of financial assets held, which is particularly pronounced for the holding of stocks and shares. Social interaction is also found to influence the amount of financial assets held as well as the level of household net worth. In contrast, there appears to be no clear relationship between social interaction and the holding of unsecured debt, suggesting that social interaction has distinct effects across different parts of the household balance sheet. When we instrument the measure of social interaction, our results once again endorse the finding that social interaction impacts differently on debt and asset holding. Interestingly, in this case, our findings support an inverse association between debt and social interaction.
    Keywords: assets; debt; household finances; social interaction.
    JEL: D12 D14 D71
    Date: 2012
  7. By: Ramon Marimon; Juan Pablo Nicolini; Pedro Teles
    Abstract: We study the interplay between competition and trust as efficiency-enhancing mechanims in the private provision of money. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a bound on effciency. Stationary inflation must be non-negative and, therefore, the Friedman rule cannot be achieved. The quality of money can only be observed after its purchasing capacity is realized. In that sense money is an experience good.
    Keywords: Currency competition; Trust; Inflation
    JEL: E40 E50 E58 E60
    Date: 2011
  8. By: Emily Erikson; Sampsa Samila
    Abstract: Research on the exploration and exploitation of knowledge in organizations suggests that the autonomy of subsidiaries or units encourages innovation. However, that same autonomy potentially discourages the exploitation of innovations through inter-unit communication – suggesting a tradeoff between innovation, associated with exploration, and communication, associated with exploitation. Analyzing data on the operational decisions of captains in the English East India Company, we find that high unit autonomy encourages the transfer of information via social networks, whereas centralization depresses the use of social networks. Further, the information transferred via social networks does make its way into the formal knowledge base of the firm.
    Date: 2012
  9. By: Kocher, Martin G.; Luhan, Wolfgang J.; Sutter, Matthias
    Abstract: Empirical work on Akerlof’s theory of gift exchange in labor markets has concentrated on the fair wage-effort hypothesis. In fact, however, the theory also contains a social component that stipulates that homogenous agents that are employed for the same wage level will exert more effort, resulting in higher rents and higher market efficiency, than agents that receive different wages. We present the first test of this component, which we call the fair uniform-wage hypothesis. In our laboratory experiment, we establish the existence of a significant efficiency premium of uniform wages. However, it is not the consequence of a stronger level of reciprocity by agents, but of the retrenchment of sanctioning options on the side of principals with uniform wages. Hence, implementing limitations to contractual freedom can have efficiency-enhancing effects.
    Keywords: gift exchange; multiple agents; uniform contracts; collective wage; experiment
    JEL: C72 C91 C92 D21 J31 J50
    Date: 2012–03
  10. By: Smith, John; Bezrukova, Katerina
    Abstract: It is commonly assumed that identification with a social group is constant throughout the play of a one-shot game in the absence of feedback. We provide evidence which challenges this assumption. We direct subjects to play one of two versions of the prisoner's dilemma game. These versions are distinguished by the relative attractiveness of the uncooperative action. We refer to the version with a relatively attractive uncooperative action as the Easy Game and the other as the Difficult Game. We find that for the subjects who play the Difficult Game, their change in group identification is significantly related to their action selected. No such relationship exists within the Easy Game. Additionally, we find that the change primarily occurs after the action is selected rather than upon inspection of the game. We discuss the implications of our findings to settings both inside and outside of the laboratory.
    Keywords: Group Identification; Experimental Game Theory; Endogenous Preferences; Social Identity; Decision Difficulty
    JEL: Z10 C91 C72
    Date: 2012–03–14
  11. By: Anastasios Koukoumelis (Max Planck Institute of Economics, Jena); M. Vittoria Levati (Max Planck Institute of Economics, Jena, and Department of Economics, University of Verona)
    Abstract: We report on an experiment designed to explore whether and how anger affects future levels of cooperation. Participants play three consecutive one-shot games. In between two identical two-person public goods games there is a mini dictator game that, depending on the treatment, either gives or does not give the recipient the opportunity to scold the dictator via a text message. We find that the recipients that receive an unfair offer contribute significantly less in the second public goods game. Yet, such contribution cuts are less frequent and notably smaller when messaging is allowed for. We conclude that although anger has a lasting negative effect on cooperation, giving voice to it helps to curtail selfishness.
    Keywords: Dictator minigame, Public goods game, Emotions, Cooperation
    JEL: C72 C91 C92 D63
    Date: 2012–03–07
  12. By: Felix Bierbrauer; Nick Netzer
    Abstract: We introduce intentions-based social preferences into a Bayesian mechanism design framework. If social preferences are observable, any tension between material efficiency, incentive compatibility, and voluntary participation can be resolved. Hence, the classical impossibility results that the conventional mechanism design literature has established are turned into possibility results. We also investigate different possibilities how to incorporate kindness sensations into assessments of welfare. For the case of unobservable social preferences, we suggest a notion of psychological robustness. Psychologically robust mechanisms can be implemented without any need to acquire information about the intensity of social preferences. We show that the mechanisms which have been the focus of the conventional mechanism design literature need to be modified only slightly to achieve psychological robustness.
    Keywords: Mechanism design, psychological games, social preferences, intentions, reciprocity, revelation principle
    JEL: C70 C72 D02 D03 D82 D86
    Date: 2012–03
  13. By: John E. Roemer (Dept. of Political Science, Yale University)
    Abstract: Although evidence accrues in biology, anthropology and experimental economics that homo sapiens is a cooperative species, the reigning assumption in economic theory is that individuals optimize in an autarkic manner (as in Nash and Walrasian equilibrium). I here postulate an interdependent kind of optimizing behavior, called Kantian. It is shown that in simple economic models, when there are negative externalities (such as congestion effects from use of a commonly owned resource) or positive externalities (such as a social ethos reflected in individuals’ preferences), Kantian equilibria dominate Nash-Walras equilibria in terms of efficiency. While economists schooled in Nash equilibrium may view the Kantian behavior as utopian, there is some -- perhaps much -- evidence that it exists. If cultures evolve through group selection, the hypothesis that Kantian behavior is more prevalent than we may think is supported by the efficiency results here demonstrated.
    Keywords: Kantian equilibrium, Social ethos, Implementation
    JEL: D60 D62 D64 C70 H30
    Date: 2012–03
  14. By: Tonin, Mirco (University of Southampton); Vlassopoulos, Michael (University of Southampton)
    Abstract: We conduct an experiment in which subjects make a series of decisions of allocating an endowment of £10 between themselves and a passive recipient that is either a charity or the experimenter. When making these decisions subjects are informed that one of them will be chosen randomly at the end to determine payoffs. After all decisions have been made and it has been revealed which decision will determine payoffs we offer subjects an opportunity to opt out from their initial decision and receive £10 instead. We find that around one third of subjects choose to opt out. The fact that a subject decides to revise a decision to give and chooses instead to exit and keep the whole amount – an option that was available when she made the first decision and was not exercised – indicates that giving in the first instance was not motivated solely by altruism toward the recipient. We argue that opting out indicates that giving is also motivated by self-image concerns.
    Keywords: dictator game, charitable giving, opting-out, self-image
    JEL: C91 D03 D64
    Date: 2012–02
  15. By: García Muñoz, Teresa (Universidad de Granada); Neuman, Shoshana (Bar-Ilan University)
    Abstract: This study reviews and evaluates the intertwined relationship between immigration and religiosity, focusing on the two sides of the Atlantic – Europe and the United States. Based on the existing literature and on a statistical analysis of several data sets (the International Social Survey Program – ISSP: Module Religion, 2008; the European Social Survey – ESS, waves 2002-2010; and the General Social Survey – GSS, waves 2002-2010) the following aspects are explored: (i) the current religious landscape of Europe and of the United States and projections for the future; (ii) religiosity of immigrants (in Europe and the United States): are they more religious than the native populations (in terms of church attendance and of prayer habits)?; (iii) how does religiosity of immigrants affect integration: is it serving as a bridge that smoothens integration into the local population, or as a buffer against the harsh integration process?; and (iv) are the intersections between religiosity and integration different in Europe and in the United States, due to historical differences in the state-religion relationship, immigration policies and concepts? The main findings are the following: (a) immigrants are indeed more religious than the populations in the receiving countries. This fact, combined with higher fertility rates and also a continued inflow of immigrants, will lead to major changes in the religious landscape, both in Europe and in the United States; and (b) while in the united States religiosity of immigrants serves as a bridge between the immigrants and the local population, in Europe it has mainly the function of a buffer and of "balm to the soul".
    Keywords: immigration, religion, integration, Europe, United States
    JEL: J11 J15 Z12 Z13
    Date: 2012–02

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