nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2012‒09‒30
eighteen papers chosen by
Fabio Sabatini
Universita' la Sapienza

  1. Trust and trustworthiness with singleton groups By Fabio Galeotti; Daniel John Zizzo
  2. Trust and Trustworthiness under the Prospect Theory: A field experiment in Vietnam By Quang Nguyen; Marie-Claire Villeval; Hui Xu
  3. Guanxi, performance and innovation in entrepreneurial service projects. By Iván Arribas; Penélope Hernández; Jose E. Vila
  4. An entrepreneur’s social capital and performance The role of access to information in the Argentinean case By Iván Arribas; Mariel Fornoni; Jose E. Vila
  5. Germs, Social Networks and Growth By Alessandra Fogli; Laura Veldkamp
  6. Incentives and Group Identity By Masella, Paolo; Meier, Stephan; Zahn, Philipp
  7. Do I Care if You Know I Betrayed You? By James C. Cox; Danyang Li
  8. Social and Moral Norms in the Laboratory By Charness, Gary; Schram, Arthur
  9. Efficiency, Team building, and Spillover in a Public-goods Game By Charness, Gary
  10. Shaping of the Nation: The Effect of Fourth of July on Political Preferences and Behavior in the United States By Madestam, Andreas; Yanagizawa-Drott, David
  11. Letting Down the Team? Social Effects of Team Incentives By Babcock, Philip; Bedard, Kelly; Charness, Gary; Hartman, John; Royer, Heather
  12. Risk Aversion and Religion By Noussair, C.N.; Trautmann, S.T.; Kuilen, G. van de; Vellekoop, N.
  13. Free-Riding and Performance in Collaborative and Non-Collaborative Groups By Tibor Besedes; Cary Deck; Sarah Quintanar; Sudipta Sarangi; Mikhael Shor
  14. Do Social Networks Prevent Bank Runs? By Hubert Janos Kiss; Ismael Rodriguez-Lara; Alfonso Rosa-Garcia
  15. Social self in a virtual world By Hansson, Thomas
  16. Giving versus Taking: A "Real Donation" Comparison of Warm Glow and Cold Prickle By Philip J. Grossman; Catherine C. Eckel
  17. Explaining EU Citizens' Trust in the ECB in Normal and Crisis Times By Ehrmann, Michael; Soudan, Michel; Stracca, Livio
  18. The Impact of Random Help on the Dynamics of Indirect Reciprocity By Charlotte Klempt

  1. By: Fabio Galeotti (School of Economics, University of East Anglia); Daniel John Zizzo (School of Economics, University of East Anglia)
    Abstract: We present an experiment investigating the effects of having an individual identified as a singleton group. The presence of a singleton group reduces trustworthiness. The majority group members discriminate against the singled out group member when they are not responsible of the distinct status of this person. When the singleton group member is identified based on negative characteristics, he or she returns significantly less. Overall, having singleton groups has no benefits for trust and is potentially disruptive for trustworthiness.
    Keywords: Justification, trust games, groups, responsibility
    JEL: C72 C91 Z13
    Date: 2012–02–01
  2. By: Quang Nguyen (Nanyang Technological University, 14 Nanyang Drive, Singapore 637332, Singapore); Marie-Claire Villeval (University of Lyon, F-69007, France; GATE, CNRS, 93, Chemin de Mouilles, F-69130, Ecully, France; IZA, Bonn, Germany); Hui Xu (University of Lyon, F-69007, France; GATE, CNRS, 93, Chemin de Mouilles, F-69130, Ecully, France)
    Abstract: We study the influence of risk and time preferences on trust and trustworthiness by conducting a field experiment in Vietnamese villages and by estimating the parameters of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences. We find that while probability sensitivity or risk aversion do not affect trust, loss aversion influences trust indirectly by lowering the expectations of return. Also, more risk averse and less present biased participants are found to be trustworthier. The experience of receiving remittances influences behavior and a longer exposure to a collectivist economy tend to reduce trust and trustworthiness.
    Keywords: Trust, trustworthiness, risk preferences, time preferences, Cumulative Prospect Theory, Vietnam, field experiment
    JEL: C91 C93 D81 D90
    Date: 2012
  3. By: Iván Arribas (ERI-CES); Penélope Hernández (ERI-CES); Jose E. Vila (ERI-CES)
    Abstract: This paper analyzes the role played by two dimensions of entrepreneurs’ private social capital in the survival, growth and innovativeness of entrepreneurial service ventures: local size and preferential attachment degree. We build a bi-dimensional measure of social capital based on network models and a methodology to estimate this measure for any group of entrepreneurs. Based on a survey of service entrepreneurs who launched their business in the city of Shanghai, we show that roles played by each dimension are quite different. A large local size of the network increases the chances of survival of the new venture. However, the chance to become a dynamic venture is only related to entrepreneurs’ preferential attachment degree. This finding has relevant political and managerial implications.
    Keywords: social capital, networks, innovation, entrepreneurship
    Date: 2012–09
  4. By: Iván Arribas (ERI-CES); Mariel Fornoni (Universidad Nacional de Mar del Plata); Jose E. Vila (ERI-CES)
    Abstract: Abstract: Purpose – The aim of this paper is to analyze the impact of an entrepreneur’s social capital on their access to information, and how such access improves the performance of their entrepreneurial project. Design/methodology/approach – A Structural Equations Model (SEM) is estimated and validated from a database including information from 282 Argentinean entrepreneurs who answered a questionnaire specifically designed for this research. The analysis of this model allowed us to determine the impact of dependent latent variables on the performance of the start-up. Findings – The performance of an entrepreneurial project depends on an entrepreneur’s access to finance, markets and information. Specific dimensions of social capital facilitate access to these resources: the relational dimension facilitates access to information; the resources dimension makes access to finance easier; the structural dimension helps the entrepreneur to access markets. Research limitations/implications – The sample is not large enough to analyze differences among specific types of entrepreneurial projects: for instance, the role of social capital in industrial and service entrepreneurship (activity sector), the differences between the federal capital, Buenos Aires, and the rest of the country (location), and between female and male entrepreneurs (gender). Originality/value - Our results help to understand which dimensions of an entrepreneur’s social capital facilitate access to information and how these specific dimensions enhance the performance of their project. Hence, this paper has managerial and policy implications for generation of dynamic entrepreneurial projects capable of becoming development drivers.
    Keywords: Entrepreneur, Social Capital, Information resources, Republic of Argentina
    Date: 2012–09
  5. By: Alessandra Fogli; Laura Veldkamp
    Date: 2012
  6. By: Masella, Paolo (University of Mannheim); Meier, Stephan (Columbia University); Zahn, Philipp (University of Mannheim)
    Abstract: This paper investigates in a principal-agent environment whether and how group membership influences the effectiveness of incentives and when incentives can have “hidden costs”, i.e., a detrimental effect. We show experimentally that in all interactions control mechanisms can have hidden costs for reasons specific to group membership. In within-group interactions control has detrimental effects because the agent does not expect to be controlled and reacts negatively when being controlled. In between-group interactions, agents perceive control more hostile once we condition on their beliefs about principal's behavior. Our finding contributes to the micro-foundation of psychological effects of incentives.
    Keywords: crowding out, motivation, incentives, social preferences, social identity, trust, experiment
    JEL: C91 D03 Z13
    Date: 2012–08
  7. By: James C. Cox; Danyang Li
    Abstract: It has been reported that betrayal aversion in influences the trust decision (Bohnet and Zeckhauser 2004; Bohnet et al. 2008). This paper adds to the literature by examining how concern for others' disutility from betrayal can affect the decision to repay trust. We compare trustees' behavior when betrayal is obfuscated to an identical monetary payoffs situation where betrayal is revealed. We find that more trustees choose to defect in our experiment when betrayal is obfuscated than when it is revealed. Our result suggests that concern for betrayal costs influences not only the decision to trust but also the decision to repay trust.
    Keywords: Experiments, Betrayal Cost, Trust, Cooperation
    JEL: C72 C91
    Date: 2012–09
  8. By: Charness, Gary; Schram, Arthur
    Abstract: Social norms involve observation by others and external sanctions for violations,while moral norms involve introspection and internal sanctions. We develop a simple model ofindividual preferences that incorporates moral and social norms. We then examine dictatorchoices, where we create a shared understanding by providing advice from peers with nofinancial payoff at stake. We vary whether advice is given, as well as whether choices are madepublic. This design allows us to explicitly separate the effects of moral and social norms. Wefind that choices are in fact affected by a combination of observability and the sharedunderstanding.
    Keywords: Economics, General, Economics, Other, experiment, social norms, moral norms, individual preferences, dictator choices
    Date: 2012–02–05
  9. By: Charness, Gary
    Abstract: The notions of one’s social identity, group membership, and homophily have recentlybecome topics for economic theory and experiments. Yet, since people are members of manygroups (e.g., race, gender, handedness) what determines which identity or identities are the mostsalient in different environments? Further, how do these factors trade off against one’s financialinterest? We conduct public-goods experiments in which we permit endogenous group-formationand vary whether there is a team-building exercise and whether some people receive anendowment twice as much as others receive. We do see evidence that team identity affectsendogenous networks when there is only one endowment type; however, when both identities arepresent, high-endowment participants are strongly attracted to linking up with each other. Oneinteresting result is that the team-building exercise greatly increases the level of contributionwithout respect to whether one is linked to people from one’s team-building exercise.Apparently the positive feeling engendered by the group exercise spills over to participants whowere in another team; however, this is not the case when one group has been in a 4-person teamand the other four participants have not.
    Keywords: Economics, Other, Economics, General, experiment, identity, team building, homophily
    Date: 2012–05–04
  10. By: Madestam, Andreas (Bocconi University); Yanagizawa-Drott, David (Harvard University)
    Abstract: This paper examines whether social interactions and cultural practices affect political views and behavior in society. We investigate the issue by documenting a major social and cultural event at different stages in life: the Fourth of July celebrations in the United States during the 20th century. Using absence of rainfall as a proxy for participation in the event, we find that days without rain on Fourth of July in childhood shift adult views and voting in favor of the Republicans and increase turnout in presidential elections. The effects we estimate are highly persistent throughout life and originate in early age. Rain-free Fourth of Julys experienced as an adult also make it more likely that people identify as Republicans, but the effect depreciates substantially after a few years. Taken together, the evidence suggests that political views and behavior derive from social and cultural experience in early childhood, and that Fourth of July shapes the political landscape in the Unites States.
    Date: 2012–08
  11. By: Babcock, Philip; Bedard, Kelly; Charness, Gary; Hartman, John; Royer, Heather
    Abstract: This paper estimates social effects of incentivizing people in teams. In two fieldexperiments featuring exogenous team formation and opportunities for repeated socialinteractions, we find large team effects that operate through social channels. The teamcompensation system induced agents to choose effort as if they valued a marginal dollar ofcompensation for their teammate from two-thirds as much (in one study) to twice as much asthey valued a dollar of their own compensation (in the other study). We conclude that socialeffects of monetary team incentives exist and can induce effort at lower cost than through directindividual payment.
    Keywords: Economics, General, Economics, Other, Applied Economics, field experiment, team incentives, social effects
    Date: 2012–08–10
  12. By: Noussair, C.N.; Trautmann, S.T.; Kuilen, G. van de; Vellekoop, N. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: Using a dataset for a demographically representative sample of the Dutch population, containing a revealed preference risk attitude measure, as well as very detailed information about participants’ religious background, we study three issues raised in previous literature. First, we find strong confirmatory evidence that more religious people, as measured by church membership or attendance, are more risk averse. Second, we obtain some evidence that Protestants are more risk averse than Catholics. Third, our data suggest that the link between risk aversion and religion is driven by social aspects of church membership, rather than by religious beliefs themselves.
    Keywords: risk aversion;religion;Catholicism;Protestantism.
    JEL: C91 C93 D81 Z12
    Date: 2012
  13. By: Tibor Besedes (Georgia Institute of Technology); Cary Deck (University of Arkansas); Sarah Quintanar (Louisiana State University); Sudipta Sarangi (Louisiana State University and DIW Berlin); Mikhael Shor (University of Connecticut)
    Abstract: Individuals bring effort to a group to achieve a common objective. Group membership introduces a free-riding incentive, reducing effort, as well as a sense of social responsibility, increasing effort. We show experimentally that the free-riding effect is stronger. Group members significantly reduce their effort in non-collaborative groups. With collaboration, the negative effects of free-riding are not observed. Collaborating groups outperform both groups without collaboration and individuals. They do as well, statistically, as the best constituent member would have done on her own. Thus, groups aggregate existing knowledge rather than create new knowledge. JEL Classification: C92, D71, Z13 Key words: group behavior, decision making, free-riding, experiments
    Date: 2012–02
  14. By: Hubert Janos Kiss (Eötvös Loránd University, Department of Economics); Ismael Rodriguez-Lara (ERI-CES); Alfonso Rosa-Garcia (Universidad de Murcia, Dpt. Analisis Economico)
    Abstract: We report experimental evidence on the effect of observability of actions on bank runs. We model depositors' decision-making in a sequential framework, with three depositors located at the nodes of a network. Depositors observe the other depositors' actions only if connected by the network. A sufficient condition to prevent bank runs is that the second depositor to act is able to observe the first one's action (no matter what is observed). Experimentally, we find that observability of actions affects the likelihood of bank runs, but depositors' choice is highly influenced by the particular action that is being observed. This finding suggests a new source for the ocurrence of bank runs. Observability of actions can provoke runs that cannot be explained neither by coordination nor by fundamental problems, the two main culprits identified by the literature.
    Keywords: bank runs, social networks, coordination failures, experimental evidence
    JEL: C70 C91 D80 D85 G21
    Date: 2012–06
  15. By: Hansson, Thomas (CSIR, Blekinge Inst of Technology)
    Abstract: Dialectic contradictions at work between construction and experiencing of social self by individual or collective influences. The human species is able to combine separate but related processes for social and material interaction by means of individual input to collective activity systems. It is, however, a bit of a mystery how the balancing process between activity, consciousness and personality materializes in modern artifacts, by means of social support and as virtual agency. This study suggests a way of dealing with the features of collective virtual personality.
    Keywords: Activity; consciousness; personality; artifact; social support; dialectics
    Date: 2012–09–20
  16. By: Philip J. Grossman; Catherine C. Eckel
    Abstract: This paper revisits the question of "warm glow" vs. "cold prickle" and the provision of public goods. It also addresses the question, is giving in Dictator Games an expression of altruism or an artifact of experimentation? What is unique about this paper is that we employ a “real donation†lab experiment in a context-rich environment: contributions go to actual public goods (i.e., charitable organizations). Our study focuses directly on subjects' willingness to contribute to and take from a charity. We do this by allocating the initial endowment in one of three ways: either all to the subjects, all to the charity, or evenly between the two. Subjects are allowed to either contribute or take back as little or as much as they wish. We find that how the endowment is initially allocated is irrelevant when comparing the two extreme cases. On the other hand, we find evidence suggesting that, when the endowment is evenly split between the two parties, the initial even split seems to act as a powerful focal point: the final outcome is insignificantly different from the initial allocation.
    Keywords: Warm Glow, Cold Prickle, Charity, Altruism
    JEL: H4 D64 C72 C91
    Date: 2012–09
  17. By: Ehrmann, Michael (European Central Bank, Frankfurt/Main, Germany); Soudan, Michel (European Central Bank, Frankfurt/Main, Germany); Stracca, Livio (European Central Bank, Frankfurt/Main, Germany)
    Abstract: We study the determinants of trust in the ECB as measured by the European Commission’s Eurobarometer survey in particular during the global financial crisis and the European sovereign debt crisis. We find that the fall in trust in the ECB in crisis times can be rather well explained based on the pre-crisis determinants, and show that the fall in trust reflected the macroeconomic deterioration, a more generalised fall in the trust in European institutions in the wake of the crisis as well as the severity of the banking sector’s problems, to which the ECB was associated in the public opinion.
    Keywords: Trust, Eurobarometer, Global financial crisis, Public opinion, European Central Bank
    JEL: E58 G21 Z13
    Date: 2012–08
  18. By: Charlotte Klempt
    Abstract: Cooperation via indirect reciprocity uses a partner's reputation to enable subjects to direct help to those who cooperated themselves. As a partner's reputation provides information whether the partner helped a third party in the past or not, subjects can help those partners with a good reputation. Whereas help in former studies implied a denite monetary transfer to a third party, the present study explores the implica- tions for cooperation via indirect reciprocity if a helping decision does not necessarily involve a monetary transfer. The study employs a "repeated helping game" where a chance move determines whether help actually leads to a reward for the recipient or not. Hence, a good reputation may not coincide with a positive income for the third party. The experimental results show that, rstly, if a chance move determines the outcome of helping decisions, the information about the past decision of partners has a smaller eect on cooperation rates as compared to a situation where helping decisions denitely lead to rewards. This suggests that risk substantially inuences the dynamics of indi- rect reciprocity. Secondly, subjects only reciprocate the recipient's good reputation and disregard whether a good reputation also involves a benecial outcome for the third party. Here, ndings oppose those found in studies on direct reciprocity where both the player's good intentions or good will and the actual monetary amount transferred aect reciprocal back-givings.
    Keywords: Indirect reciprocity; Reputation; Cooperation
    JEL: C91 D8
    Date: 2012–09

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