nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2013‒12‒06
nine papers chosen by
Fabio Sabatini
Universita' la Sapienza

  1. Does trust mean giving and not risking? Experimental evidence from the trust game By Garapin, A.; Muller, L.; Rahali, B.
  2. Spillovers in networks of user generated content: Evidence from 23 natural experiments on Wikipedia By Kummer, Michael E.
  3. Genesis and Persistence of Trust in Banks By Ingrid Groessl; Rolf von Luede; Jan Fleck
  4. Local Clusters of Entrepreneurs -neighborhood peer effects in entrepreneurship? By Andersson, Martin; Larsson , Johan P.
  5. Do inventors talk to strangers? On proximity and collaborative knowledge creation By Riccardo Crescenzi; Max Nathan; Andrés Rodríguez-Pose
  6. Does education or underlying human capital explain liberal economic attitudes? By John V.C. Nye; Sergiy Polyachenko
  7. Optimal policy and the role of social contacts in a search model with heterogeneous workers By Yuliia Stupnytska
  8. Informal loans in Russia: credit rationing or borrower’s choice? By Maria Semenova; Victoria Rodina
  9. Does Patience Matter for Marriage Stability? Some Evidence from Italy By De Paola, Maria; Gioia, Francesca

  1. By: Garapin, A.; Muller, L.; Rahali, B.
    Abstract: In a within-subjects framework, we compare levels of transfer in the trust game and in the (triple) dictator game. We control preferences towards risk through the Holt and Laury test (2002) and social preferences with the ring test (Liebrand, 1984). We then provide evidence that social preferences correlate with levels of transfer, while risk attitudes do not. Finally, we also cast doubts on the predictive power of the two tests.
    JEL: C72 C90
    Date: 2013
  2. By: Kummer, Michael E.
    Abstract: Endogeneity in network formation hinders the identification of the role social networks play in generating spillovers, peer effects and other externalities. This paper tackles this problem and investigates how the link network between articles on the German Wikipedia influences the attention and content generation individual articles receive. Identification exploits local exogenous shocks on a small number of nodes in the network. It can thus avoid the usually required, but strong, assumptions of exogenous observed characteristics and link structure in networks. This approach also applies if, due to a lack of network information, identification through partial overlaps in the network structure fails (e.g. in classrooms). Exogenous variation is generated by natural and technical disasters or by articles being featured on the German Wikipedia's start page. The effects on neighboring pages are substantial; I observe an increase of almost 100 percent in terms of both views and content generation. The aggregate effect over all neighbors is also large: I find that a view on a treated article converts one for one into a view on a neighboring article. However, the resulting content generation is small in absolute terms. --
    Keywords: Social Media,Information,Knowledge,Spillovers,Large-scale Networks,Natural Experiment
    JEL: L17 D62 D85 D29
    Date: 2013
  3. By: Ingrid Groessl (University of Hamburg); Rolf von Luede (University of Hamburg); Jan Fleck (University of Hamburg)
    Abstract: Against the background of the ongoing financial crisis the question of the genesis and persistence of trust in banks plays an important role not only for the prevention of bank runs and, related to this, for the regulation of banks, but also with respect to the perspective of customer loyalty of private investors towards their housebanks. Moreover, addressing issues of trust in banks will contribute to a better understanding of how private investors cope with the uncertainties and complexities prevailing in financial markets and will thus enrich the theory of decision-making. In every type of financial system trust has an important role. Due to the high and ever growing complexity of financial systems institutional trust meanwhile plays a more important role than personal trust. A set of institutions facilitate trust-building or trust-guarding and sometimes even trust-granting functions. Trust allows the trustor to transform fundamental uncertainty into risk. From an empirical point of view trust in banks has emerged over time as a process in which trust-guarding and trust-granting institutions played a crucial role. So it is no surprise that in a bank based financial system like Germany private households are still entrusting their money to banks today even after the financial crisis. However, since the late 1980s the institutional framework of the financial market and the governance of corporations have changed dramatically. Actors have common experiences and rely on similar sources of information and institutional knowledge and are also exposed to similar discursive models. This contributes to a social normalization or habituation of the perception of risk. We conclude that such normalization – in the sense of a conventionalization – also greatly influences the economic decision-making behavior of private households. We argue that the bank-oriented ‘conservative’ investment decisions of German savers are due to a ‘cultural embedded framework of logics of actions’ and are based on ‘intergenerational inheritance’. The understanding of the embeddedness of economic actors in different cultures such as private households and the emergence of diverse institutional settings in a historic process enables us to understand from a micro-perspective their investment behavior in different economic systems.
    Keywords: trust in banks, institutional and personal trust, trust granting institutions, decision making behavior of private investors
    Date: 2013–11
  4. By: Andersson, Martin (CIRCLE, Lund University, Sweden and Blekinge Institute of Technology); Larsson , Johan P. (Centre for Entrepreneurship and Spatial Economics (CEnSE), Department of Economics, Finance and Statistics, Jönköping International Business School (JIBS), Jönköping)
    Abstract: Entrepreneurial activity is significantly predicted by the presence of other entrepreneurs in the residential neighborhood. One plausible source of such spatial clustering is local peer effects, where individuals’ decisions to become entrepreneurs are influenced by entrepreneurial neighbors. Using geo-coded matched employer-employee data for Sweden, we find that sharing residential neighborhood with established entrepreneurs has a statistically significant and robust influence on the probability than an individual leaves employment for entrepreneurship. An otherwise average neighborhood with a 5 percentage point higher entrepreneurial intensity all else equal produces between 7 and 8 more entrepreneurs per square kilometer, each year. Local peer effects appear as important in explaining local clusters of entrepreneurs, and imply a local feedback-effect in which the presence of established entrepreneurs in a neighborhood breeds new local entrepreneurs
    Keywords: entrepreneurship; clusters; peer effects; local social interactions; role models; neighborhood; social network externalities; path dependence
    JEL: J24 L26 R12 R23
    Date: 2013–11–25
  5. By: Riccardo Crescenzi; Max Nathan; Andrés Rodríguez-Pose
    Abstract: This paper investigates how physical, organisational, institutional, cognitive, social, and ethnic proximities between inventors shape their collaboration decisions. Using a new panel of UK inventors and a novel identification strategy, this paper systematically explores the net effects of all these ‘proximities’ on co-patenting. The regression analysis allows us to identify the full effects of each proximity, both on choice of collaborator and on the underlying decision to collaborate. The results show that physical proximity is an important influence on collaboration, but is mediated by organisational and ethnic factors. Over time, physical proximity increases in salience. For multiple inventors, geographic proximity is, however, much less important than organisational, social, and ethnic links. For inventors as a whole, proximities are fundamentally complementary, while for multiple inventors they are substitutes.
    Keywords: innovation, patents, proximities, regions, knowledge spillovers, collaboration, ethnicity,
    JEL: O31 O33 R11 R23
    Date: 2013–12
  6. By: John V.C. Nye (George Mason University, Department of Economics. Professor); Sergiy Polyachenko (National Research University Higher School of Economics, Center for Institutional Studies. Junior Research Fellow)
    Abstract: There is a worldwide tendency for more educated people to trust in markets, private business, and trade, and to distrust government regulation and public provision relative to the less educated even in countries where people generally favor regulation (Aghion, et al. 2010). Individual survey data drawn from the Russian RMLS indicate that for Russia, as for most of the world, respondents with higher levels of education are more likely to trust private businesses and privatization, to distrust government regulation, and to favor lesser provision of services by the State (vs. the private sector). This matches the macro survey findings of Aghion et al. (2010) for the transition economies and the work of Caplan (2001, 2002, 2007). However, it is not clear whether education is a causal factor in these preferences or whether education is proxying for different levels of cognitive ability, health, or other forms of human capital. We use individual height data as instruments for formal education to remove the contemporaneous effects of schooling itself on the education-trust link. We find that this IV estimation leaves us with clear and persistent links between education and market friendly attitudes in Russia. This human capital effect is also quite independent of the role of age in determining liberal attitudes and is not simply a cohort effect. This seems to conform to the worldwide observation that – whatever the independent changing institutions – greater health and cognitive ability seem to promote market liberal beliefs in and of themselves. In contrast, socially liberal attitudes are not correlated with education in the IV regressions
    Keywords: Non-cognitive abilities, human capital, IV, trust, market liberal preferences, Russia
    JEL: I21
    Date: 2013
  7. By: Yuliia Stupnytska (Center for Mathematical Economics, Bielefeld University; Center for Mathematical Economics, Bielefeld University)
    Abstract: This paper develops a search model with heterogeneous workers and social networks. High ability workers are more productive and have a larger number of professional contacts. Firms have a choice between a high cost vacancy in the regular labour market and a low cost job opening in the referral market. In this setting the model predicts that a larger number of social contacts is associated with a larger wage gap between high and low ability workers and a larger difference in the equilibrium unemployment rates. Next we demonstrate that the decentralized equilibrium is inefficient for any value of the bargaining power. There are two reasons for the inefficiency. First, the private gain from creating a job in the referral market is always below the social gain, so the equilibrium unemployment of high ability workers is above its optimal value. Moreover, high ability workers congest the market for low ability workers, so the equilibrium wage inequality is inefficiently large. This is in contrast to the result of Blazquez and Jansen (2008) showing that the distribution of wages is compressed in a search model with heterogeneous workers. Finally, we show that a combination of taxes and subsidies can restore the optimal allocation.
    Keywords: social capital, social networks, referrals, wage dispersion, wage compression
    JEL: J23 J31 J38 J64
    Date: 2013–09
  8. By: Maria Semenova (National Research University Higher School of Economics. Center for Institutional Studies. Research fellow); Victoria Rodina (National Research University Higher School of Economics. Center for Institutional Studies. Research assistant)
    Abstract: This paper examines the strategies of Russian households for choosing either the formal or informal banking sector as a source of credit. We aim to learn why households refuse to become clients of a bank and prefer to instead raise funds by borrowing from individuals – friends, colleagues, relatives, and other private parties. We use the results of “Monitoring the Financial Behavior of the Population” (2009-2010), a national survey of Russian households. Our results suggest that a household’s choice of the informal credit market is based not only on economic factors, but also on some institutional ones, including financial literacy, trust in the banking sector, and credit discipline. We show that choosing the informal market is explained by a lack of financial literacy, measured by mathematical competence and home accounting, as well as by a lack of trust in the banking sector as a whole. Borrowers from private parties demonstrate a higher degree of credit discipline: those who believe that repaying a loan is not obligatory are less frequently among informal borrowers and they choose the bank credit market. Our findings, however, are still in line with credit rationing theory. We show that better financial conditions reduce a household’s probability to use both formal and informal credit markets in favor of pure bank borrowing
    Keywords: household, consumer loans, informal loans, Russia
    JEL: D14 G21 P2
    Date: 2013
  9. By: De Paola, Maria (University of Calabria); Gioia, Francesca (University of Calabria)
    Abstract: Time preferences can affect divorce probability both affecting the quality of the match and affecting the spouses' reactions to negative shocks. We analyze the relationship between time preferences and divorce decisions using data from the Italian Survey on Household Income and Wealth, which provides a measure of time preferences based on a hypothetical financial situation in which individuals have to decide how much money to give up in order to receive a certain amount of money today instead of in one year's time. Controlling for a number of individual and family characteristics, we find that an increase in impatience of one standard deviation increases the probability of experiencing divorce by almost one percentage point. Our results are not affected by reverse causality problems and are robust when controlling for individual risk attitudes. We also find that more risk averse individuals are less likely to experience divorce.
    Keywords: divorce, time preferences, impatience, risk aversion
    JEL: I20 D03 D91 J01
    Date: 2013–11

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