nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2014‒06‒28
six papers chosen by
Fabio Sabatini
La Sapienza University of Rome

  1. Ode to the sea: Workplace Organizations and Norms of Cooperation By Uri Gneezy; Andreas Leibbrandt; John A. List
  2. Trust, trustworthiness and selection into the financial industry By Gill, Andrej; Heinz, Matthias; Schumacher, Heiner
  3. But Most of All We Love Each Other: Does Social Cohesion Pay off? Evidence from FDI Flows to Middle Income Countries By Wasseem Mina
  4. Peer Effects Identified Through Social Networks: Evidence from Uruguayan Schools By Gioia De Melo
  5. A Network Formation Model for Social Object Networks By Somayeh Koohborfardhaghighi; Jorn Altmann
  6. Quantifying the Value of a Political Connection: The Case of Presidential Elections in Colombia By Daniel Vaughan

  1. By: Uri Gneezy; Andreas Leibbrandt; John A. List
    Abstract: The functioning and well-being of any society and organization critically hinges on norms of cooperation that regulate social activities. Empirical evidence on how such norms emerge and in which environments they thrive remains a clear void in the literature. To provide an initial set of insights, we overlay a set of field experiments in a natural setting. Our approach is to compare behavior in Brazilian fishermen societies that differ along one major dimension: the workplace organization. In one society (located by the sea) fishermen are forced to work in groups whereas in the adjacent society (located on a lake) fishing is inherently an individual activity. We report sharp evidence that the sea fishermen trust and cooperate more and have greater ability to coordinate group actions than their lake fishermen counterparts. These findings are consistent with the argument that people internalize social norms that emerge from specific needs and support the idea that socio-ecological factors play a decisive role in the proliferation of pro-social behaviors.
    JEL: C93 J0
    Date: 2014–06
  2. By: Gill, Andrej; Heinz, Matthias; Schumacher, Heiner
    Abstract: We examine trust and trustworthiness of individuals with varying professional preferences and experiences. Our subjects study business and economics in Frankfurt, the financial center of Germany and continental Europe. In the trust game, subjects with a high interest in working in the financial industry return 25 percent less than subjects with a low interest. We find no evidence that the extent of professional experience in the financial industry has a negative impact on trustworthiness. We also do not find any evidence that the financial industry screens out less trustworthy individuals in the hiring process. In a prediction game that is strategically equivalent to the trust game, the amount sent by first-movers was significantly smaller when the second-mover indicated a high interest in working in finance. These results suggest that the financial industry attracts less trustworthy individuals, which may contribute to the current lack of trust in its employees. --
    Keywords: Trust,Trustworthiness,Selection,Financial Industry
    JEL: C9 G2 M5
    Date: 2014
  3. By: Wasseem Mina (United Arab Emirates University)
    Abstract: The World Bank (2013) argues that social cohesion shapes the context in which entrepreneurs make investment decisions and therefore job creation. In this paper, we focus on FDI as one link of primary importance in this argument, and empirically examine the relationship between social cohesion and FDI flows. Using panel data on 52 middle income countries for the period 1984-2012, we first identify social cohesion-related institutions using principal component analysis and then examine the influence of those institutions individually and as a principal component on FDI flows. PCA identifies religion in politics, internal and external conflicts, and ethnic tensions as institutions with highest loadings. Adopting dynamic panel estimation methodologies - FE, IV and system GMM, the paper finds that religion in politics stands out with its positive influence on FDI inflows. A one percentage point improvement in religion in politics increases FDI flows by about 0.5 percentage point. The positive influence is robust to the estimation methodology adopted and to the sample size. The novelty of the paper lies first in identifying social cohesion-related institutions and principal component and second in discovering the positive influence of less religion in politics on FDI flows to middle income countries.
    Keywords: Social cohesion, FDI, Institutions, Religion in politics, Ethnic tensions, Conflicts, Panel data models, Fixed effects, Instrumental variables estimation, System GMM.
    Date: 2014–06–06
  4. By: Gioia De Melo
    Abstract: his paper represents the first application of a novel strategy to estimate peer effects in education in a developing country. It provides evidence on peer effects in standardized tests by exploiting a unique data set on social networks in Uruguayan primary schools. The identification method enables one to solve the reflection problem via instrumental variables that emerge naturally from the network structure. Correlated effects are controlled for via classroom fixed effects. I find significant endogenous effects in reading, math scores (and mixed evidence on science): a one-standard deviation increase in peers' scores increases own scores by about 40 percent of a standard deviation. Simulation exercises show that, in a context of socioeconomic segregation in which students are assigned to public schools according to their neighborhood of residence, peer effects may amplify educational inequalities.
    Keywords: Peer effects, education, social networks, inequality
    JEL: I21 I24 O1
    Date: 2014–02
  5. By: Somayeh Koohborfardhaghighi (Technology Management, Economics, and Policy, College of Engineering, Seoul National University); Jorn Altmann (College of Engineering, Seoul National University)
    Abstract: Social networks can be differentiated according to the type of entities (i.e., humans or objects) that are represented within them. These networks can be called human networks and social object networks, respectively. Actors in human networks can act strategically to maximize their own payoffs during interactions with other humans. However, actors in social object network (e.g., SaaS service network) are not able to perceive the environment and act strategically upon that at any time. Only when they join the network, humans position them such that it maximizes their payoff. This paper contends that existing network formation models lack sufficient attention to social object networks (e.g., SaaS service networks). Therefore, we propose a new network formation model, through which we are able to explain how a SaaS service network emerges during the service composition procedure by service developers. The new network formulation model not only considers the usage frequency and reputation but also the similarity of the functionalities of the main SaaS services. It also explains how social objects (e.g., SaaS services) can benefit from establishment of links among each other in the network.
    Keywords: Software-as-a-Service Network, Network Formation Model, Social Object Networks.
    JEL: C02 C6 C15 D85 L86 O33
    Date: 2014–06
  6. By: Daniel Vaughan
    Abstract: Using a novel biographical database including all Presidents and presidential candidates in Colombia for the period 1833-2010 I show that the value of a political connection can be quantified in terms of the votes transferred within a political network. I consider three types of political networks depending on whether links are created by a cabinet or foreign service appointment and a family connection. I find that a one standard deviation increase in votes received by connections generates a maximum gain of three-fourths of a standard deviation. I also reject for the presence of network endogeneity that may bias the estimates.
    Keywords: Political Networks, Political Dynasties, Economic and Political History, Colombia, Elites
    JEL: D85 P16 D72 N46 O54
    Date: 2013–11

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