nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2014‒09‒05
eight papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Online networks and subjective well-being By Sabatini, Fabio; Sarracino, Francesco
  2. Divided Loyalists or Conditional Cooperators? Creating Consensus about Cooperation in Multiple Simultaneous Social Dilemmas By Matthew W. McCarter; Anya C. Samak; Roman M. Sheremeta
  3. Declining Moral Standards and the Role of Law By Sue H. Mialon
  4. Waste Prevention and Social Preferences: The Role of Intrinsic and Extrinsic Motivations By Grazia Cecere; Susanna Mancinelli; Massimiliano Mazzanti
  5. Two Shades of (Warm) Glow: multidimensional intrinsic motivation, waste reduction and recycling By Alessio D'Amato; Susanna Mancinelli; Mariangela Zoli
  6. Asymmetry of Information within Family Networks By Joachim De Weerdt; Garance Genicot; Alice Mesnard
  7. Communication networks in markets By Edoardo Gallo
  8. Institutions, corruption and entrepreneurship: Indonesian evidences By Julien Hanoteau; Virginie Vial

  1. By: Sabatini, Fabio; Sarracino, Francesco
    Abstract: We argue that the use of online networks may threaten subjective well-being in several ways, due to the inherent attributes of Internet-mediated interaction and through its effects on social trust and sociability. We test our hypotheses on a representative sample of the Italian population. We find a significantly negative correlation between online networking and well-being. This result is partially confirmed after accounting for endogeneity. We explore the direct and indirect effects of the use of social networking sites (SNS) on well-being in a SEM analysis. We find that online networking plays a positive role in subjective well-being through its impact on physical interactions, whereas SNS use is associated with lower social trust. The overall effect of networking on individual welfare is significantly negative.
    Keywords: social participation; online networks; Facebook; social trust; social capital; subjective well-being; hate speech; broadband; digital divide
    JEL: O32 O33 Z13
    Date: 2014–08–25
  2. By: Matthew W. McCarter (University of Texas – San Antonio and Economic Science Institute); Anya C. Samak (University of Wisconsin – Madison); Roman M. Sheremeta (Case Western Reserve University and the Economic Science Institute)
    Abstract: The current social dilemma literature lacks theoretical consensus regarding how individuals behave when facing multiple simultaneous social dilemmas. The divided-loyalty hypothesis, from organizational theory, predicts that cooperation will decline as individuals experience multiple social dilemmas with different compared to the same group members. The conditional-cooperation hypothesis, from behavioral economics, predicts that cooperation will increase as individuals experience multiple social dilemmas with different compared to the same group members. We employ a laboratory experiment to create consensus between these literatures and find support for the conditional-cooperation hypothesis. The positive effect of interacting with different group members comes from participants having an opportunity to shift their cooperative behavior from the less cooperative to the more cooperative group.
    Keywords: cooperation, conditional cooperation, defection, loyalty, experiments, public goods, social dilemmas
    Date: 2014
  3. By: Sue H. Mialon
    Abstract: This paper examines how moral rules form in the process of social learning in order to analyze the relationship between legal rules and moral rules. Members of society learn morality from the observed behavior of other members. Their incentive to act morally is influenced by their expectation of other members' moral behavior. The moral standards of a society are built on the outcomes of such interactions over time. We show that moral standards can quickly deteriorate even if the majority of the members have a strong moral sense individually. When insufficient moral sanctions for wrongful actions are observed, the members form a belief that the society's moral standards are lower than what they had expected. Such a belief encourages more wrongful actions and results in less incentive for the members to act morally. As the moral standards decline, moral rules may not be able to regulate behavior. Legal sanctions can prevent such a decline as they offer an objective and time-invariant level of expectation for the enforcement of rules. Hence, morality is less likely to degenerate in the presence of legal rules. We discuss how strong morality can enhance the effectiveness of law enforcement, in turn.
    Date: 2014–08
  4. By: Grazia Cecere (Telecom Ecole de Management, Institut Mines Telecom, France. Université Paris Sud, RITM, France.); Susanna Mancinelli (Dept. of Economics and Management. University of Ferrara, Italy.); Massimiliano Mazzanti (Dept. of Economics and Management. University of Ferrara, Italy. CERIS CNR Milan. SEEDS – Sustainability Environmental Economics Dynamics Studies.)
    Abstract: It is only recently that EU policies have started defining targets for waste reduction despite waste prevention being at the top of the ‘waste hierarchy’. Against this backdrop, we examine whether individual behavior towards waste reduction is more strongly driven by extrinsic motivations such as social norms, or intrinsic motivations, such as altruistic preferences. We exploit a new survey covering 22,759 individuals from EU27 countries. Our results suggest that individual preferences matter to move beyond an orientation based on recycling, to achieve a reduction of the sources of waste. Behaviour patterns which lead to waste reduction are seldom socially oriented, seldom exposed to peer pressure, and very reliant on purely ‘altruistic’ attitudes.
    Keywords: intrinsic motivations, extrinsic motivations, social norms, recycling, waste reduction, green preferences.
    JEL: Q53 R11 K42
    Date: 2014–08
  5. By: Alessio D'Amato (Università di Roma Tor Vergata, Italy.); Susanna Mancinelli (Dept. of Economics and Management. University of Ferrara, Italy.); Mariangela Zoli (Università di Roma Tor Vergata, Italy.)
    Abstract: Although waste minimization is considered a priority to face the waste problem, EU targets on waste prevention are very recent and most policy interventions have been oriented towards increasing recycling rates. As a result, signi?cant improvements in recycling performance have been attained, but there is still no clear evidence of increased waste prevention. A possible explanation of different trends in waste minimization and recycling rates may be found in the existence of interactions between the two waste related behaviors as well as between policies and households?personal motivations. The aim of the paper is to investigate both theoretically and empirically the impact of waste policies on recycling and prevention decisions of individuals. In the theoretical analysis, we model the role played by policies, intrinsic and extrinsic motivations in affecting waste decisions by explicitly allowing for complementarities or substitutabilities between recycling and waste reduction efforts in the utility function. Theoretical results suggest that policies, social norms and intrinsic motivations may affect recycling and prevention both directly and indirectly, through their reciprocal interactions. Theoretical predictions are then tested in a structural equation model, by using data for England from the Survey of Public Attitudes and Behaviours toward the Environment (Defra, 2010). Our empirical investigation shows that waste prevention and recycling activities reinforce each other, supporting the existence of complementarities between them. Nevertheless, when we consider also indirect effects among the involved variables, our results suggest that recycling policies may be not very effective in stimulating waste prevention whilst policy measures acting through intrinsic motivations may have stronger impacts.
    Date: 2014–08
  6. By: Joachim De Weerdt (EDI, Tanzania); Garance Genicot (Georgetown University); Alice Mesnard (City University, London and Institute for Fiscal Studies.)
    Abstract: This paper studies asymmetry of information and transfers within a unique data set of 712 extended family networks from Tanzania. Using cross-reports on asset holdings, we construct measures of misperception of income among all pairs of households belonging to the same network. We show that there is significant asymmetry of information and no evidence of major systematic over-evaluation or under-evaluation of income in our data, although there is a slight over-evaluation on the part of migrants regarding non-migrants. We develop a static model of asymmetric information that contrasts altruism, pressure and exchange as motives to transfer. The model makes predictions about the correlations between misperceptions and transfers under these competing explanations.Testing these predictions in the data gives support to the model of transfers under pressure or an exchange motive with the recipient holding all the bargaining power.
    Keywords: Asymmetric Information, Transfers, Pressure, Exchange, Altruism.
    Date: 2014–08
  7. By: Edoardo Gallo
    Abstract: This paper proposes a dynamic model of bargaining to analyze decentralized markets where buyers and sellers obtain information about past deals through their social network. There is a unique equilibrium outcome which depends crucially on the peripheral (least connected) individuals in each group. The main testable predictions are that groups with high density and/or low variability in the number of connections across individuals allow their members to obtain a better deal. These predictions are tested in a lab experiment through 4 treatments that vary the network that groups of 6 subjects are assigned to. The results of the experiment lend support to the theoretical predictions: subjects converge to a high equilibrium demand if they are assigned to a network that is dense and/or has low variability in number of connections across members. An extension explores an alternative set-up in which buyers and sellers belong to the same social network: if the network is regular and the agents are homogeneous then the unique equilibrium division is 50-50
    Keywords: network, communication, experiment, noncooperative bargaining, 50-50 division
    JEL: C73 C78 C91 C92 D83
    Date: 2014–08–26
  8. By: Julien Hanoteau; Virginie Vial
    Abstract: Baumol (1990) famously argues that entrepreneurs are individuals who exploit opportunities, be they in the productive (enterprises) or the unproductive sector (lobbying, rent-seeking, corruption…), and that the prevalence of one or the other type of entrepreneurship depends on the quality of surrounding institutions: high quality institutions foster productive entrepreneurship, whereas failing institutions trigger unproductive entrepreneurship. However, recent empirical studies evidence that the effect of institutions quality on productive entrepreneurship might be more ambiguous. Dreher and Gassebner (2013) observe that if poor quality of institutions is detrimental to firms’ entry, this effect is nonetheless moderated in presence of corruption. Our central argument in this paper, is that productive entrepreneurs may be forced by their institutional environment to bribe so as to be able to start and develop their venture. As a result, a same quality of institutions has different effects on bribing and non-bribing productive entrepreneurships. This has strong implications for the literature addressing the effect of institutions on entrepreneurship. We complement Baumol’s (1990) theory, by acknowledging that productive entrepreneurs do not form a homogenous population, but have characteristics that are shaped by the institutional context in which their venture is embedded. This recognition is likely to unveil the true effects of institutions on productive entrepreneurship, whereas analyses that make a clear distinction between productive and unproductive entrepreneurship and treat the former as a homogenous population, are likely to result in misleading observations. This contribute to the embryonic literature regarding the role of entrepreneurship in the development of emerging countries (Bruton et al., 2008; Naudé, 2010; Peng and Zhou, 2005; Stenholm et al. 2013). We use panel data econometrics, with a unique dataset that merges two databases, the Statistik Industri from the Indonesian Bureau of public statistics (BPS) and the Indonesian Family Life Survey (IFLS) from the Rand Corporation. It enables us to analyze the effect of varying formal and informal institutions quality, across regional districts (190), on the 5-digit sector-level (321) entry rates of bribing and non-bribing new ventures, over the period 2001-2007. Although cross-country studies are more robust (Bruton et al., 2010), Indonesia compensates with its institutional features (administrative inefficiency, pervasive corruption, ethnic diversity…) that are common to many emerging countries (Miguel et al., 2005) while presenting large within institutional quality variations, and will therefore allow an easier generalization of our findings. Analyzing patterns across districts within a single country permits to use homogenous survey instruments of institutions and consistently available data on the bribing component of entrepreneurship, which is rarely the case for cross country regressions and reduces some of their problems of measurement and omitted variables (Miguel et al., 2005; Sobel, 2008).The results show that regulative and resource-allocative institutions are significant factors impacting the rate of entrepreneurship. Moreover, the results confirm our main conjecture that these institutions have differentiated effects on bribing and non-bribing entrepreneurship, taken at the local and 5-digit sector level. On the one hand, deficient regulative (low quality of business permits delivery and excessive indirect taxations) and resource-allocative institutions (poor quality of access to transport infrastructures and services) are detrimental to entrepreneurship. On the other hand, we find that bribing new ventures suffer less than other ventures, from a deteriorated access to high quality business permits delivery and transport infrastructures and services. Our results also show that in districts and 5-digit sectors with a poor supply of banking services, bribing entrepreneurs have a better entry rate than others, suggesting that they have a better access to financings through corruption.
    Keywords: Indonesia, Developing countries, Miscellaneous
    Date: 2014–07–03

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