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on Social Norms and Social Capital |
| By: | Kathy Baylis; Yazhen Gong; Shun Wang |
| Abstract: | Social capital can facilitate community governance, but not all social capital is alike. We distinguish bonding social capital (within a village) from bridging social capital (between villages), and we compare their effects on the management of a common pool resource. We develop a theoretical model and show that bonding social capital can improve common pool resource management, while the effect of bridging social capital is mixed. We test these findings using primary data from Yunnan, China on social capital and firewood collection on communal lands. We find that bonding social capital decreases the consumption of the common pool resource, and bridging social capital erodes the effect of bonding. Bridging social capital also decreases the use of the common pool resource by villagers who are near subsistence levels of consumption. Our results are robust to alternative measures of social capital and to treating social capital as endogenous. |
| JEL: | O13 Q2 Q23 Q56 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19195&r=soc |
| By: | Algan, Yann (Sciences Po, Paris); Cahuc, Pierre (Ecole Polytechnique, Paris) |
| Abstract: | This survey reviews the recent research on trust, institutions and growth. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms and the methods employed to identify the causal impact of trust on economic performance are reviewed. We document the mechanisms of interactions between trust and economic development in the realms of finance, innovation, the organization of firms, the labor market and the product market. The last part reviews recent progress to identify how institutions and policies can affect trust and well-being. |
| Keywords: | trust, growth, institutions, well-being |
| JEL: | O11 O43 Z13 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7464&r=soc |
| By: | Shanker Satyanath; Nico Voigtlaender; Hans-Joachim Voth |
| Abstract: | Social capital – a dense network of associations facilitating cooperation within a community – typically leads to positive political and economic outcomes, as demonstrated by a large literature following Putnam. A growing literature emphasizes the potentially “dark side” of social capital. This paper examines the role of social capital in the downfall of democracy in interwar Germany by analyzing Nazi party entry rates in a cross-section of towns and cities. Before the Nazi Party’s triumphs at the ballot box, it built an extensive organizational structure, becoming a mass movement with nearly a million members by early 1933. We show that dense networks of civic associations such as bowling clubs, animal breeder associations, or choirs facilitated the rise of the Nazi Party. The effects are large: Towns with one standard deviation higher association density saw at least one-third faster growth in the strength of the Nazi Party. IV results based on 19th century measures of social capital reinforce our conclusions. In addition, all types of associations – veteran associations and non-military clubs, “bridging” and “bonding” associations – positively predict NS party entry. These results suggest that social capital in Weimar Germany aided the rise of the Nazi movement that ultimately destroyed Germany’s first democracy. |
| JEL: | N14 N44 P16 Z1 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19201&r=soc |
| By: | Luciano Mauro (Università di Trieste, Italy, Dipartimento di Scienze Economiche Aziendali, Statistiche e Matematiche); Francesco Pigliaru (Università di Cagliari and CRENoS, Italy Dipartimento di Scienze Economiche e Aziendali) |
| Abstract: | By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly through the functioning of local institutions, decentralization enhances (hampers) growth wherever social capital is high (low). We define our hypothesis within a growth model with public capital, and use the North-South divide in Italy to assess the quantitative plausibility of our model. A calibration exercise shows that it accounts for the major swings in the Italian regional divide since 1861. |
| Keywords: | Social Capital, Convergence, Economic Growth |
| JEL: | O4 N9 R5 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.57&r=soc |
| By: | Pietro Battiston; Simona Gamba |
| Abstract: | We study the effect of social pressure on tax compliance, focusing on the compliance of shop sellers to the legal obligation of releasing tax receipts for each sale. We carry out a field experiment on bakeries in Italy, where a strong gap exists between the legal obligation and the actual behavior of sellers. Social pressure is manipulated by means of an explicit request for a receipt when not released. We find that a single request for a receipt causes a 17 per cent rise in the probability of a receipt being released for a sale occurring shortly thereafter. This provides evidence of a social scal multiplier: on average, a single request for a receipt causes 2.38 additional receipts being released overall. |
| Keywords: | Tax evasion, field experiments, social norms, social pressure |
| JEL: | H32 K34 E62 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:249&r=soc |
| By: | Kiridaran Kanagaretnam; Stuart Mestelman; S. M. Khalid Nainar; Mohamed Shehata |
| Abstract: | In a laboratory-controlled environment we provide experimental evidence on the effects of transparency (complete over incomplete information) and empowerment on trust (investment by a principal) and trustworthiness (reciprocal behavior of an agent). We implement a simple two-person investment game. We find that when principals are empowered by being able to punish agents who may not act in a way the principal believes is in the principal’s best interest, trust and investment increases over that which is realized in the absence of empowerment regardless of the degree of transparency. In transparent environments the effect of empowerment is about the same regardless of whether empowerment is introduced or removed. However, in opaque environments, the loss of empowerment has a substantially greater negative effect on trust than the positive effect associated with the introduction of empowerment. While this environment is substantially abstracted from the naturally occurring environment, these results suggest that practical public policies designed to increase transparency in financial transactions are likely to have positive effects on investment. Furthermore, public policies designed to empower principals, such as the Say-on-Pay practices, are likely to increase investment while the limitation of the empowerment of principals with respect to their agents (consistent with deregulation) will have a much more dramatic negative impact on trust (and ultimately, investment). |
| Keywords: | Investment, Empowerment, Disempowerment, Veto, Trust, Reciprocity, Say-on-Pay |
| JEL: | C7 C9 D3 D8 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2013-09&r=soc |
| By: | Nizar Allouch (, Queen Mary, University of London, School of Economics and Finance, UK) |
| Abstract: | This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an “asymptotic neutrality” of redistributive policies. |
| Keywords: | Public Goods, Segregated Society, Private Provision, Networks, Bonacich Transfer Index |
| JEL: | C72 D31 H41 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.52&r=soc |
| By: | Giacomo De Giorgi; Michele Pellizzari |
| Abstract: | Little is known about the economic mechanisms leading to the high level of clustering in behavior commonly observed in the data. We present a model where agents can interact according to three distinct mechanisms, and we derive testable implications which allow us to distinguish between the proposed mechanisms. In our application we study students’ performance and we find that a mutual insurance mechanism is consistent with the data. Such a result bears important policy implications for all those situations in which social interactions are important, from teamwork to class formation in education and co-authorship in academic research. |
| JEL: | I21 J0 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19202&r=soc |
| By: | Hensvik, Lena (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nordström Skans, Oskar (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | The paper studies how social job finding networks affect firms' selection of employees and the setting of entry wages. Our point of departure is the Montgomery (1991) model of employee referrals which suggests that it is optimal for firms to hire new workers through referrals from their most productive existing employees, as these employees are more likely to know others with high unobserved productivity. Empirically, we identify the networks through coworker links within a rich matched employer-employee data set with cognitive and non-cognitive test scores serving as predetermined indicators of individual productivity. The results corroborate the Montgomery model's key predictions regarding employee selection patterns and entry wages into skill intensive jobs. Incumbent workers of high aptitude are more likely to be linked to entering workers. Firms also acquire entrants with higher ability scores but lower schooling when hiring linked workers supporting the notion that firms use referrals of productive employees in order to attract workers with better qualities in dimensions that would be difficult to observe at the formal market. Furthermore, the abilities of incumbent workers are reflected in the starting wages of linked entrants, suggesting that firms use the ability-density of social networks when setting entry wages. Overall the results suggest that firms use social networks as a signal of worker productivity, and that workers therefore benefit from the quality of their social ties. |
| Keywords: | Referrals; wage inequality; employer learning; cognitive skills |
| JEL: | J24 J31 J64 M51 Z13 |
| Date: | 2013–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_015&r=soc |
| By: | Thunström, Linda (Department of Economics and Finance, University of Wyoming); van 't Veld, Klaas (Department of Economics and Finance, University of Wyoming); Shogren, Jason F. (Department of Economics and Finance, University of Wyoming); Nordström, Jonas (Department of Economics, Lund University) |
| Abstract: | Are people strategically ignorant of the negative externalities their activities cause the environment? Herein we examine if people avoid costless information on those externalities and use ignorance as an excuse to reduce pro-environmental behavior. We develop a theoretical framework in which people feel guilt from causing harm to the environment (e.g., emitting carbon dioxide) and from deviating from the social norm for pro-environmental behavior (e.g., offsetting carbon emissions). Our model predicts that people may benefit from avoiding information on their harm to the environment, and that they use ignorance as an excuse to engage in less pro-environmental behavior. It also predicts that the cost of ignorance increases if people can learn about the social norm from the information. We test the model predictions empirically with an experiment that involves an imaginary long- distance flight and an option to buy offsets for the flight’s carbon footprint. More than half (53 percent) of the subjects choose to ignore information on the carbon footprint alone before deciding their offset purchase, but ignorance significantly decreases (to 29 percent) when the information additionally reveals the social norm, namely the share of air travelers who buy carbon offsets. We find evidence that some people use ignorance as an excuse to reduce pro-environmental behavior— ignorance significantly decreases the probability of buying carbon offsets. |
| Keywords: | Behavioral; Decision Making; Externality; Ignorance; Social norms |
| JEL: | D03 D81 D83 |
| Date: | 2013–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_022&r=soc |
| By: | James Andreoni; A. Abigail Payne; Justin Smith; David Karp |
| Abstract: | We explore the effects of local ethnic and religious diversity on private donations to charity. We find that an increase in religious or ethnic diversity decreases donations. The ethnicity effect is driven by non-minorities and blacks, and is strongest in high income, low education areas. The religious effect is driven by Catholics, and is concentrated in high income, high education areas. We find no evidence that diversity affects the fraction of households that donate. Our results provide a parallel to the negative effects of diversity on publicly provided goods, and opens new challenges for fundraisers and policy makers. |
| JEL: | H41 R23 J11 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2013-11&r=soc |
| By: | Adena, Maja; Huck, Steffen; Rasul, Imran |
| Abstract: | When asking for donations, charitable organizations often use suggestions concerning the amount of potential contributions. However, the evidence concerning the effects of such suggestions is scarce and inconsistent. Unlike the majority of existing studies concerned with small-money solicitations, we examine the effect of larger nonbinding suggestions in the context of middle-range donations which are relevant in practice. In our randomized field experiment, opera visitors received solicitation letters asking to support a social youth project organized by the opera house. The three different treatments were: no suggestion and suggestions of 100 and 200, respectively. Both suggestions were larger than average and median donations in this context. The findings are that suggestions substantially influence the distribution of donations received. The mean amounts given increase significantly if a suggestion is made. The increase is stronger in the 200 treatment. On the other hand, the participation rate decreases if a suggestion is made. Overall, the returns from the campaign increase non-significantly when a suggestion is made. The solicitation was repeated a year later, without any suggestion. There is weak evidence that suggestions have a long-term effect on individual contribution-level decisions. -- Karitative Organisationen suggerieren oft den Spendern eine bestimmte Beitragshöhe. Allerdings wissen wir wenig über die Wirkung solcher Empfehlungen. Es gibt wenig Literatur zu dem Thema und die Aussagen sind auch nicht immer konsistent. Wir untersuchen die Wirkung einer Spendenempfehlung in dem Kontext mittlerer Spenden, die in der Praxis relevanter sind als die Kleinspenden, die im Zentrum bisheriger Literatur lagen. In unserem randomisierten Feldexperiment haben Opernbesucher Anfragebriefe erhalten mit einer Bitte das Sozialprojekt der Oper für Kinder und Jugendliche zu fördern. Die drei unterschiedliche Treatments waren: keine Empfehlung, eine Empfehlung von 100 sowie 200 Euro. Der empfohlene Beitrag wurde so gewählt, dass er über dem aus ähnlichen Kampagnen bekanntem Durschnitt bzw. Median lag. Die Ergebnisse zeigen, dass die Empfehlungen die Verteilung der Spenden stark beeinflussen. Die durchschnittliche positive Spende ist höher mit Empfehlung. Der Anstieg ist größer, wenn 200 Euro suggeriert werden. Andererseits wird seltener gespendet im Fall einer Empfehlung. Die Spendeneinnahmen aus der Kampagne steigen insgesamt mit der Empfehlung, allerdings nicht signifikant. Die Teilnehmer erhielten eine weitere Spendenanfrage ohne Empfehlung ein Jahr später. Es zeigt sich, dass die Empfehlungen auch eine Langzeitwirkung auf die Entscheidung bezüglich der Spendenhöhe haben. |
| Keywords: | Charitable giving,Field experiment,Suggestions |
| JEL: | C93 D12 D64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2013304&r=soc |
| By: | James Andreoni; A. Abigail Payne |
| Abstract: | Using data from charitable organizations in the US, authors have established that government grants to charities largely crowd out giving from other sources, but that this reduction is due mostly to reduced fundraising activities of the charity itself. We use much more detailed data from over 13,000 charities in Canada, measured for up to 15 years, to provide valuable new insights into this phenomenon. In particular, dollars received from individuals would increase with an increase in government grants if fundraising expenditures were held constant. Non-tax receipted giving from fundraising would decrease. A good portion of the crowd-out is attributable to giving from other institutions, such as foundations and other charities. The effect from this measure, about one-third of the measured crowding out—represents a potential loss of dollars to the charitable sector as a result of government grants. |
| JEL: | H00 H32 H50 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2013-10&r=soc |
| By: | Thomas Horvath; Peter Huber |
| Abstract: | We analyse the role of ethnic networks, segregation and diversity of a region on migrants’ success in integration into the host countries’ labour markets. We find a robust negative impact of ethnic networks on unemployment probabilities of the foreign born and a positive one on employment probabilities. In addition a similarly robust positive impact of ethnic diversity on the unemployment probabilities and a negative one on employment probabilities is found. With respect to over-education our results are less robust, but in their majority point to a negative impact of ethnic networks on the probability of over-educated employment and an insignificant or positive impact of diversity. Segregation at the country level, by contrast, remains an insignificant determinant of both the probability of unemployment and of overeducated employment in most specifications and all three variables seem to be only very weakly correlated to the probability of being detached from the labour market and to the probability of being in education. |
| Keywords: | Integration, networks, diversity |
| JEL: | D83 J71 R23 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:7:d:0:i:22&r=soc |
| By: | Franz Hackl; Michael Hummer; Gerald Pruckner |
| Abstract: | We analyzed the impact of social networks on general practitioners’ (GPs) referral behavior based on administrative panel data from 2,684,273 referrals to resident specialists made between 1998 and 2007. To construct estimated social networks, we used information on the doctors’ place and time of study and their hospital work history. We found that GPs referred more patients to specialists within their social networks and that patients referred within a social network had fewer follow-up consultations and were healthier as measured by the number of inpatient days. Consequently, referrals within social networks tended to decrease healthcare costs by overcoming information asymmetry with respect to specialists’ abilities. This is supported by evidence suggesting that within a social network, better specialists receive more referrals than worse specialists in the same network. |
| Keywords: | Referral behavior, general practitioners, information asymmetry, social networks |
| JEL: | I1 I11 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2013_08&r=soc |
| By: | Billand, P.; Bravard, C.; Kamphorst, J.; Sarangi, S. |
| Abstract: | Social networks, be it on the internet or in real life, facilitate information flows. We model this by giving agents incentives to link with others and receive information through those links. We consider networks where agents have an incentive to confirm the information they receive from others. Our paper analyzes the social networks that are formed. We first study the existence of Nash equilibria and then characterize the set of strict Nash networks. Next, we characterize the set of strictly efficient networks and discuss the relationship between strictly efficient networks and strict Nash networks. Finally, we check the robustness of our results by allowing for heterogeneity among agents, possibility of bilateral deviations of agents, and decay in network. |
| Keywords: | R&D COLLABORATION;NETWORK FORMATION;MULTI-MARKET OLIGOPOLIES |
| JEL: | C72 D85 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2013-06&r=soc |
| By: | Blume, Lawrence E. (Department of Economics, Cornell University, Ithaca, USA, and Santa Fe Institute and IHS Vienna); Brock, William A. (Economics Department, University of Wisconsin-Madison, USA and University of Missouri, Columbia); Durlauf, Steven N. (Department of Economics, University of Wisconsin-Madison, USA); Jayaraman, Rajshri (European School of Management and Technology, Berlin, Germany) |
| Abstract: | This paper provides a systematic analysis of identification in linear social interactions models. This is both a theoretical and an econometric exercise as the analysis is linked to a rigorously delineated model of interdependent decisions. We develop an incomplete information game that describes individual choices in the presence of social interactions. The equilibrium strategy profiles are linear. Standard models in the empirical social interactions literature are shown to be exact or approximate special cases of our general framework, which in turn provides a basis for understanding the microeconomic foundations of those models. We consider identification of both endogenous (peer) and contextual social effects under alternative assumptions on a priori information about network structure available to an analyst, and contrast the informational content of individual-level and aggregated data. Finally, we discuss potential ramifications for identification of endogenous group selection and differences between the information sets of analysts and agents. |
| Keywords: | Social interactions, identification, incomplete information games |
| JEL: | C21 C23 C31 C35 C72 Z13 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:298&r=soc |
| By: | Pablo Branas-Garza (Middlesex University London); Ramon Cobo-Reyes (Universidad de Granada); Natalia Jimenez (Universidad de Granada); Giovanni Pontiy (Universidad de Alicante and LUISS Guido Carli, Roma) |
| Abstract: | Limited attention has been devoted on how (real-life) social networks are elicited and mapped, even less from the viewpoint of mechanism design. This paper surveys the few mechanisms that have been proposed by the experimental literature to this purpose. These mechanisms differ in their incentive structure, as well as in the means of reward they employ. We compare these elicitation devices on the basis of the estimated differences in the characteristics of the induced networks, such as the number of (mutual) links, correspondence and accuracy. Our main conclusion is that the elicited network architecture is itself dependent on the nature (and the structure) of the incentives. This, in turn, should provide the social scientist with guidelines on the most appropriate device to use, depending on the research objectives. |
| Keywords: | Social Networks, Experimental Economics |
| JEL: | C93 D85 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:13-21&r=soc |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Stephan Nüesch (Business Economics - Corporate Governance - Personnel Economics, University of Zurich, Switzerland) |
| Abstract: | Many scholars argue that the delegation of decision rights to independent institutions promotes trust and specific investments. We test this conjecture with variations of the trust game in which the back transfer decision is delegated to a third party. A randomly chosen third party with a fixed payment induces larger investments over time although the experimental design rules out reputation building. Changes in the third party’s selection procedure eliminate this benefit. If the third party gets a reward for the appointment, delegation actually destroys trust. Investors (unwarrantedly) fear a diffusion of responsibility and lower back transfers in this case. |
| Keywords: | Delegation, Trust, Third Party, Appointment procedures, Remuneration |
| JEL: | D33 J33 J41 |
| Date: | 2013–20–13 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1313&r=soc |
| By: | Michael P. Cameron (University of Waikato); Patrick Barrett (University of Waikato); Bob Stewardson (University of Waikato) |
| Abstract: | The importance of social media for election campaigning has received a lot of attention recently. Using data from the 2011 New Zealand General Election and the size of candidates’ social media networks on Facebook and Twitter, we investigate whether social media is associated with election votes and probability of election success. Overall, our results suggest that there is a statistically significant relationship between the size of online social networks and election voting and election results. However, the size of the effect is small and it appears that social media presence will therefore only make a difference in closely contested elections. |
| Keywords: | social media; elections; voting; New Zealand |
| JEL: | D72 L82 |
| Date: | 2013–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:13/08&r=soc |
| By: | Spiros Bougheas (School of Economics, University of Nottingham); Jeroen Nieboer (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risktaking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers. |
| Keywords: | experimental economics, choice under risk, advice, social influence, peer effects |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-04&r=soc |
| By: | Kaivan Munshi; Mark Rosenzweig |
| Abstract: | This paper widens the scope of the emerging literature on economic networks by assessing the role of caste networks in Indian local politics. We test the hypothesis that these networks can discipline their members to overcome political commitment problems, enabling communities to select their most competent representatives, while at the same time ensuring that they honor the public goods preferences of their constituents. Using detailed data on local public goods at the street level and the characteristics of constituents and their elected representatives at the ward level over multiple terms, and exploiting the random system of reserving local council seats for caste groups, we find that caste discipline results in the election of representatives with superior observed characteristics and the provision of a significantly greater level of public goods. This improvement in political competence occurs without apparently diminishing leaders' responsiveness to the preferences of their constituents, although the constituency is narrowly defined by the sub-caste rather than the electorate as a whole. |
| JEL: | H11 H4 O12 O43 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19197&r=soc |