nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒01‒26
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Does Social Trust Speed up Reforms? The Case of Central-Bank Independence By Berggren, Niclas; Daunfelt, Sven-Olof; Hellström, Jörgen
  2. Feedback and Emotions in the Trust Game By Ivo Bischoff; Özcan Ihtiyar
  3. Trust and trustworthiness in experimental organizations By Giuseppe Danese; Luigi Mittone
  4. Researching Ethnic Relations as the Outcome of Political Processes By Anaïd Flesken
  5. Social Interactions in Job Satisfaction By Semih Tumen; Tugba Zeydanli
  6. Sacred Values? The Effect of Information on Attitudes toward Payments for Human Organs By Julio J. Elias; Nicola Lacetera; Mario Macis
  7. Would I Care if I Knew? Image Concerns and Social Confirmation in Giving By Alexander S. Kritikos; Jonathan H. W. Tan
  8. On the External Validity of Social- Preference Games: A Systematic Lab-Field Study By Matteo M. Galizzi; Daniel Navarro-Martínez
  9. Transnational Business and Relational Contracting 2.0 By Thomas Dietz
  10. Social Interaction Effects and Connection to Electricity: Experimental Evidence from Rural Ethiopia By Bernard, Tanguy; Torero, Maximo

  1. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Daunfelt, Sven-Olof (HUI Research and Dalarna University); Hellström, Jörgen (Umeå University)
    Abstract: Many countries have undertaken central-bank independence reforms, but the years of implementation differ. What explains such differences in timing? This is of interest more broadly, as it sheds light on factors that matter for the speed at which economic reforms come about. We study a rich set of potential determinants, both economic and political, but put special focus on a cultural factor, social trust. We find empirical support for an inverse u-shape: Countries with low and high social trust implemented their reforms earlier than countries with intermediate levels. We make use of two factors to explain this pattern: the need to undertake reform (which is more urgent in countries with low social trust) and the ability to undertake reform (which is greater in countries with high social trust).
    Keywords: Central banks; Independence; Social trust; Inflation; Monetary policy; Reform
    JEL: E52 E58 P48 Z13
    Date: 2015–01–08
  2. By: Ivo Bischoff (University of Kassel); Özcan Ihtiyar (University of Kassel)
    Abstract: We conduct an experiment on the impact of feedback in the Trust Game. In our treatment group, the Trustee has the opportunity to give feedback to the Investor (free in choice of wording and contents). The feedback option is found to reduce the share of Investors who sent no resources to the Trustee, while the impact on average behavior is less pronounced. The notion proposed by Xiao and Houser (2005, PNAS) according to which verbal feedback and monetary sanctions are substitutes is not supported. We use the PANAS-scale (Mackinnon et al., 1999) to capture change in subjects’ short-run affective state during the experiment. Receiving feedback has an impact on the Investors’ short-run affective state but giving feedback is not found to have an effect on Trustees’ short-run affective state.
    Keywords: Trust Game, Feedback, Short-run affect, Emotions
    JEL: C91 D03 D63
    Date: 2015
  3. By: Giuseppe Danese; Luigi Mittone
    Abstract: In this paper we discuss two instruments through which corporate law attempts to promote trust and trustworthiness in business organizations: (i) monitoring of the manager by a principal, as in the agency approach; (ii) moral suasion, as in the approach according to which managers are “fiduciaries”. We present the results of a laboratory experiment designed to investigate the effectiveness of these two instruments in promoting: (i) profitable, but at the same time risky, entrustments of assets to a manager from a group of investors earning their endowment through real effort; (ii) a higher payback for those investors who entrust more assets to the manager. The first is a measure of trust of the investors in the manager, while the second is a measure of the manager’s trustworthiness. We find that moral suasion increases the investors’ trust. Monitoring also increases the investors’ trust, but only in the case in which the manager is not aware of the experimental identity of his/her principal. The manager is trustworthy up to a certain degree, regardless of the governance structure of the organization and of the accuracy with which she observes each investor’s entrustment. Finally, we find a modest positive effect of noise on trust, but no strong effect of noise on effort or trustworthiness.
    JEL: K22 C92 L21
    Date: 2015
  4. By: Anaïd Flesken (GIGA German Institute of Global and Area Studies)
    Abstract: Ethnic diversity is often seen to be detrimental to peace and stability, particularly if ethnicity is the basis for political mobilization. Mobilization is assumed to increase the salience of ethnicity, and with it in-group cohesion, out-group animosity, and national instability; yet the mechanisms have rarely been studied empirically. This article argues that we need to study ethnicity as the outcome of political processes, focus on the attitudinal mechanisms underlying ethnic relation; and examine this phenomenon at the individual level. To this end, the article first disaggregates the term “ethnicity” into attributes, meanings, and actions. Referring to constructivism, it then argues that political science should focus on meanings. Building on the theory and findings of social psychology, this paper shows that political science must distinguish analytically between meanings regarding different in- and out-group processes. Doing so can help advance the study of ethnic relations and conflict-management practices.
    Keywords: ethnic relations, ethnic conflict, institutional engineering, constructivism
    Date: 2014–08
  5. By: Semih Tumen; Tugba Zeydanli
    Abstract: The literature documents that job satisfaction is positively correlated with worker performance and pro- ductivity. We examine whether aggregate job satisfaction in a certain labor market environment can have an impact on individual-level job satisfaction. If the answer is yes, then policies targeted to increase job satisfaction can increase productivity not only directly, but through spillover externalities too. We seek an answer to this question using two different data sets from the United Kingdom characterizing two different labor market environments: Workplace Employment Relations Survey (WERS) at the workplace level (i.e., narrowly defined worker groups) and British Household Panel Survey (BHPS) at the local labor market level (i.e., larger worker groups defined in industry x region cells). Implementing an original empirical strategy to identify spillover effects, we find that one standard deviation increase in aggregate job satisfac- tion leads to a 0.42 standard deviation increase in individual-level job satisfaction at the workplace level and 0.15 standard deviation increase in individual-level job satisfaction at the local labor market level. These social interactions effects are sizable and should not be ignored in assessing the effectiveness of the policies designed to improve job satisfaction.
    Keywords: Job satisfaction; social interactions; spillovers; hierarchical model; WERS; BHPS.
    JEL: C31 D62 J28
    Date: 2015
  6. By: Julio J. Elias; Nicola Lacetera; Mario Macis
    Abstract: Many economic transactions are prohibited—even in the absence of health or safety concerns or negative externalities—because of ethical concerns that cause these exchanges to be perceived as “repugnant” if conducted through a market. Establishing a system of payments for human organs is a particularly relevant example given its implications for public health; in almost all countries, these payments are prohibited because they are considered morally unacceptable—a prohibition that societies seem to accept despite the long waitlists and high death rates for people needing a transplant. We investigate how deeply rooted these attitudes are and, in particular, whether providing information on how a price mechanism can help alleviate the organ shortage changes people’s opinions about the legalization of these transactions. We conducted a survey experiment with 3,417 subjects in the U.S. and found that providing information significantly increased support for payments for organs from a baseline of 52% to 72%, and this increase applied to most of the relevant subgroups of the analyzed sample. Additional analyses on the support for other morally controversial activities show that attitude changes in response to information depend on the type of activity under consideration and interactions with other beliefs.
    JEL: D60 H80 I19 K32 Z10 Z18
    Date: 2015–01
  7. By: Alexander S. Kritikos; Jonathan H. W. Tan
    Abstract: This paper experimentally investigates the nature of image concerns in gift giving. For this, we test variants of dictator and impunity games where the influences of social preferences on behavior are kept constant across all games. Givers maximize material payoffs by pretending to be fair when receivers do not know the actual surplus size, implying that portraying an outward appearance of norm compliance matters more than actual compliance. In impunity games, receivers can reject gifts with no payoff consequence to givers. In the face of receivers’ feedback, some givers ensure positive feedback by donating more while some avoid negative feedback by not giving at all. Removing feedback reduces the incentive to give altogether. Differing behavior in the four games implies that social confirmation plays a crucial role in the transmission of image concerns in giving.
    Keywords: Dictator, impunity, experiment, image, social confirmation
    JEL: C78 C92
    Date: 2014
  8. By: Matteo M. Galizzi; Daniel Navarro-Martínez
    Abstract: We present a lab-field experiment designed to assess systematically the external validity of social preferences elicited in a variety of experimental games. We do this by comparing behavior in the different games with a number of behaviors elicited in the field and with self-reported behaviors exhibited in the past, using the same sample of participants. Our results show that the experimental social-preference games do a poor job in explaining both social behaviors in the field and social behaviors from the past.
    Keywords: social preferences, experimental games, external validity, field behavior
    JEL: C92 C93 D03
    Date: 2015–01
  9. By: Thomas Dietz (University of Muenster - Institute of Political Science & ZenTra)
    Abstract: First, this article proposes that the rise of the Internet and further information- and communication technologies (ICT) has facilitated the evolution of a new, virtual form of relational contracts. This hypothesis is developed inductively by drawing on the results of an explorative empirical study about cross-border software development contracts. Although virtual social ties and networks do not promote the type of high-trust relations that are central to traditional relational contract theory, they reduce information asymmetries between transaction partners and facilitate the evolution of almost unrestricted virtual reputational networks. Relational contracts 2.0 emerge on the basis of ICT enabled transparency, controls and sanctioning tools. Second, the article discusses these results in the light of the wider theoretical debate about the institutional foundations of modern markets. Most importantly, it will be argued that modern ICT has significantly improved the economic performance of relational contracts. Relational contracts 2.0 are no longer restricted to small communities and long-term relationships, but are also able to allow exchange between unknown actors within competitive markets. Relational contracts 2.0 therefore do not oppose market expansions, but become mechanisms that actively promote such economic modernisation processes. The virtual society promotes the evolution of virtual relational contracts.
    Keywords: Contract Theory, Informal Norms, Relational Contract, Virtual Ties, Software-Industry
    JEL: A14 B15 L14 K12
    Date: 2015–01
  10. By: Bernard, Tanguy; Torero, Maximo
    Abstract: This paper assesses the importance of social interactions in determining an individual’s choice to connect to an electrical grid, using an original dataset on a new rural electrification program in Ethiopia. Combining GPS information with random allocation of discount vouchers for connection to the grid, we show that neighbors’ connection behaviors have large effects on a household’s connection decision. This effect is also shown to decrease by distance: no peer effect is found for neighbors living farther than 100 meters away. Evidence also suggests that expectation interactions (through social learning of the benefits of electricity) or constraint interactions (through direct externalities of one’s connection on others’ wellbeing) are unlikely to fully account for these effects, and that preference interactions (through a ‘keeping up with neighbors’ type of mechanism) appear to be a plausible explanation. We discuss implications for further research and the design of development interventions.
    Keywords: Ethiopia, Rural Electrification, Social Interactions
    JEL: C9 C93 O12 O33
    Date: 2014–09

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