nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2013‒11‒14
five papers chosen by
Fabio Sabatini
Universita' la Sapienza

  1. Friends do let friends buy stocks actively By Rawley Z Heimer
  2. Bridges or Buffers? Motives behind Immigrants’ Religiosity – A Comparative Study of Europe and the United States By Teresa Garcia-Muñoz; Shoshana Neuman
  3. The Construction of a Trustworthy Investment Opportunity: Insights from the Madoff Fraud By Stolowy, Hervé; Messner, Martin; Jeanjean, Thomas; Baker, C. Richard
  4. Kitchen Confidential? Norms for the Use of Transferred Knowledge in Gourmet Cuisine By Di Stefano , Giada; King , Andrew A.; Verona , Gianmario
  5. Bad boys: the effect of criminal identity on dishonesty By Alain Cohn; Michel André Maréchal; Thomas Noll

  1. By: Rawley Z Heimer
    Abstract: This research is the first to provide empirical evidence that social interaction is more prevalent amongst active rather than passive investors. While previous empirical work, spearheaded by Hong, Kubik, and Stein (2004), shows that proxies for sociability are related to participation in asset markets, the literature is unable to distinguish between the types of participants because of data limitations. I address this shortcoming by using data from the Consumer Expenditure Quarterly Interview Survey on individual holdings, and buying and selling of financial assets as well as expenditure variables which imply variation in the level of social activity. My findings support a new explanation> for the active investing puzzle in which informal communication tends to promote active rather than passive strategies (Han and Hirshleifer 2012).
    Keywords: Investments ; Finance
    Date: 2013
  2. By: Teresa Garcia-Muñoz; Shoshana Neuman (Bar-Ilan University)
    Abstract: This study reviews and evaluates the motives and incentives behind immigrants’ religiosity, focusing on the two sides of the Atlantic – Europe and the United States. The contribution of the study is mainly empirical, trying to identify indicators for the type of incentive – whether immigrants’ religiosity serves as a ‘bridge’ or a ‘buffer’ in the process of adaptation to the receiving country. The statistical analysis draws on data from several waves of the European Social Survey (ESS), the American General Social Survey (GSS), and the International Social Survey Program (ISSP). Estimation of extended ‘mass participation equations’ and ‘prayer equations’ leads to the following findings: (a) immigrants are indeed more religious than the populations in the receiving countries, both in Europe and in the United States; and (b) while in the United States the 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 a “balm for the soul”. There is an extensive literature on the ‘bridge versus buffer’ (or ‘bridge versus boundary’) theories and their different implications in the United States and in Europe. However, to the best of our knowledge, our paper presents an innovative attempt to disentangle the two types of motives and to show that while the former is more relevant in the United States, the latter dominates in Europe.
    Keywords: immigration; religion; integration; Europe; The United States; bridge; buffer
    JEL: J11 J15 Z12 Z13
    Date: 2013–10
  3. By: Stolowy, Hervé; Messner, Martin; Jeanjean, Thomas; Baker, C. Richard
    Abstract: In this paper, we use the investment fraud of Bernard Madoff to inquire into the production of trust in the context of financial markets. Drawing upon empirical data related to U.S. individual investors (interviews and letters) as well as documentary material, we investigate the mechanisms through which investing with Madoff came to be seen as a trustworthy investment opportunity. We show how different types of information contributed to construct Bernard Madoff as a trustworthy investment manager and how Madoff avoided meeting demands for accountability by manipulating investors in face-to-face encounters. We shed particular light on the role of institution-based forms of trust which play a critical role in facilitating economic exchanges. More specifically, we suggest that the Madoff case illuminates how the provision of information can lead to an “illusion of trustworthiness” that is difficult to escape for investors. An element of such illusion, we suggest, is inherent to the functioning of financial markets more generally.
    Keywords: Madoff; trustworthiness; illusion; financial markets;
    JEL: G10 G30 M41 M42
    Date: 2013–03–09
  4. By: Di Stefano , Giada; King , Andrew A.; Verona , Gianmario
    Abstract: When will knowledge holders share their knowledge with peers? Several studies suggest that norms of knowledge disclosure encourage knowledge transfer. More recently, scholars have hypothesized that norms of knowledge use may indirectly promote it. In this article, we synthesize a theoretical framework of the effect of norms of knowledge use and test its predictions by means of a field experiment involving more than 500 Italian chefs. For the literature on knowledge transfer, we confirm the importance of norms, but we also show that they are not complete substitutes for other means of protecting private knowledge. For the literature on social norms, we provide evidence of how actors assess others’ propensity to conform and how this influences the intention to participate in the norm-regulated exchange.
    Keywords: Social norms; knowledge transfer; institutional theory; thick rationality; intellectual property
    JEL: L00 Z00
    Date: 2013–08–07
  5. By: Alain Cohn; Michel André Maréchal; Thomas Noll
    Abstract: We conducted an experiment with 182 inmates from a maximum-security prison to analyze the impact of criminal identity on dishonest behavior. We randomly primed half of the prisoners to increase the mental saliency of their criminal identity, while treating the others as the control group. The results demonstrate that prisoners become more dishonest when we render their criminal identity more salient in their minds. An additional placebo experiment with regular citizens shows that the effect is specific to individuals with a criminal identity. Moreover, our experimental measure of dishonesty correlates with inmates’ offenses against in-prison regulation. Altogether, these findings suggest that criminal identity plays a crucial role in rule violating behavior.
    Keywords: Dishonesty, identity, crime, prison, experiment
    JEL: K00 C93 K14 K42 Z10
    Date: 2013–10

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