nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒02‒28
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. The Economic Consequences of Social Network Structure By Jackson, Matthew O. ; Rogers, Brian ; Zenou, Yves
  2. Social Capital, Trust, and Firm Performance during the Financial Crisis By Lins, Karl ; Servaes, Henri ; Tamayo, Ane
  3. The Effect of Particularism on Corruption: Theory and Empirical Evidence By Valentina Rotondi ; Luca Stanca
  4. Essays on promises, trust and disclosure By Ismayilov, H.
  5. Some Challenges in the Empirics of the Effects of Networks By Vincent Boucher ; Bernard Fortin
  6. Why have Dostojewski and Tolstoi never met? On the relation of risk attitudes and altruism By Müller, Stephan ; Rau, Holger A.
  7. Social Capital as Patterns of Connections. A Review of Bankston’s "Immigrant Networks and Social Capital" By Sabatini, Fabio
  8. The Diffusion of Information and Behavior in Social Networks: Renewable Energy Technology Adoption in Rural China By Pan He ; Marcella Veronesi
  9. Trust and Racial Income Inequality: Evidence from the U.S. By Andrea Tesei
  10. The Dynamics of Social Influence By Bary S.R. Pradelski

  1. By: Jackson, Matthew O. ; Rogers, Brian ; Zenou, Yves
    Abstract: We survey the literatures on the economic consequences of the structure of social networks. We develop a taxonomy of 'macro' and 'micro' characteristics of social inter-action networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning, diffusion, decisions, and resulting behaviors. We also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors.
    Keywords: centrality measures; contagion; diffusion; endogeneity; homophily; network formation.; social economics; social learning; Social networks
    JEL: C72 D85 L14 Z13
    Date: 2015–02
  2. By: Lins, Karl ; Servaes, Henri ; Tamayo, Ane
    Abstract: We study the extent to which a firm’s social capital, as measured by the intensity of a firm’s corporate social responsibility (CSR) activities, affects firm performance during the 2008-2009 financial crisis. We find that high-CSR firms have crisis-period stock returns that are four to five percentage points higher than low-CSR firms, all else equal. In contrast, we find no difference in returns between high- and low-CSR firms either before or after the crisis. During the crisis, high-CSR firms also experience higher profitability, sales growth, and sales per employee and a decline in their accounts receivable relative to low-CSR firms. This evidence is consistent with the view that the trust between the firm and its stakeholders and investors, built through investments in social capital, pays off when the overall level of trust in corporations and markets suffers a negative shock.
    Keywords: corporate social responsibility; financial crisis; social capital; trust
    JEL: G30
    Date: 2015–02
  3. By: Valentina Rotondi ; Luca Stanca
    Abstract: This paper investigates the role played by the cultural norms of particularism and universalism for collusive bribery. In our theoretical framework, the act of proposing or demanding a bribe violates a commonly held social norm, thus producing a psychological cost. By lowering this psychological cost, particularism increases the probability of offering or asking for a bribe. We test the predictions of the model by using individual-level data for 25 countries from the European Social Survey. Consistent with the theory, particularism is found to have a positive causal effect on the probability of offering a bribe, but no effect on the probability to be asked for a bribe. Overall, our findings indicate that policies aimed at favoring universalism may provide an effective tool in the fight against corruption.
    Keywords: Corruption, Bribe, Particularism, Universalism.
    JEL: D73 O17 C71 K42 Z13
    Date: 2015–02
  4. By: Ismayilov, H. (Tilburg University, School of Economics and Management )
    Abstract: Essays on Promises, Trust and Disclosure’ consists of three chapters. The<br/>first chapter studies whether disclosure of advisors’ interests to advice<br/>recipients can mitigate the problem of biased advice. The results of the<br/>study suggest that deceptive advice and mistrust are equally frequent<br/>with or without disclosure.<br/><br/>The second chapter reports on a study that tests whether people keep<br/>their promises because they want their actions to be consistent with<br/>their words irrespective of the effect of their promise on the person to<br/>whom the promise is made. The results do not provide support for this<br/>explanation of promise keeping. In addition, the results suggest that<br/>the positive impact of communication on cooperation does not always<br/>depend on promises.<br/><br/>The final chapter of the thesis studies how promises elicited by one’s<br/>partner, as opposed to volunteered promises, affect behavior. No significant<br/>differences in promise keeping rates between elicited and voluntary<br/>promises are found. Nevertheless, the results also suggest that eliciting a<br/>promise from one’s partner might be better than not eliciting it because<br/>the latter might be perceived as a signal of mistrust and skepticism by<br/>some people.<br/>
    Date: 2015
  5. By: Vincent Boucher ; Bernard Fortin
    Abstract: We study some recent developments and challenges in the empirics of the effects of social networks. We focus in particular on researchers’ ability to make policy recommendations based on a standard linear econometric model. We examine the potential compatibility between this type of econometric model and a microeconomic theoretical approach based on fundamentals, such as preferences, technology and decision processes. We discuss sources of identification for the social multiplier as well as for the identity of the key player. We study the possibility of testing endogeneity in network formation. We analyse the use of proxy variables and their impact for the causal interpretation of the peer effect coefficients. Our analysis suggests that greater care should be taken in grounding econometric network models to sound and credible theoretical underpinnings.
    Keywords: Social Networks, Social Multiplier, Network Formation, Identification, Proxy Variables, Policy Analysis
    JEL: A14 C33 C36 D85 Z13
    Date: 2015
  6. By: Müller, Stephan ; Rau, Holger A.
    Abstract: We experimentally analyze the relation of risk preferences and subjects aversion to advantageous inequality as measured by the guilt parameter of the Fehr and Schmidt (1999) model. Our findings reveal a significant negative correlation between subjects risk attitudes and their altruistic behavior. Risk tolerant subjects tend to be selfish, whereas risk-averse people show high levels of altruism.
    Keywords: altruism,experiment,risk preferences
    JEL: C91 D64 D81
    Date: 2015
  7. By: Sabatini, Fabio
    Abstract: Review of Immigrant Networks and Social Capital by Carl L. Bankston III. Cambridge, UK, and Malden, MA: Polity.
    Keywords: Social capital; social networks; social ties; immigration; United States.
    JEL: A1 A10 J6 Y3 Z13
    Date: 2015–02–01
  8. By: Pan He (ETH Zurich ); Marcella Veronesi (Department of Economics (University of Verona) )
    Abstract: Adopting renewable energy technologies has been seen as a promising way to reduce CO2 emissions and deforestation. This paper investigates how social networks may affect renewable energy technology adoption. We distinguish two channels through which social networks may play a role: (i) the diffusion of information; and (ii) the diffusion of behavior. Most empirical studies fail to quantitatively separate the diffusion of information and behavior in social networks. We conduct a survey on biogas technology adopting in rural China to identify individuals’ egocentric information networks. We find that both the diffusion of information and behavior drive farmers’ technology adoption. Farmers with larger egocentric information networks and a larger fraction of known adopters are more likely to adopt the biogas technology. In addition, we collect data on several attributes of alters to explore the composition of social networks. We find heterogeneous social network effects across different types of alters. Alters who have close relationships with egos such as friends and relatives or that are trusted by egos affect egos’ adoption through the diffusion of information, while less trusted alters such as government officials affect egos’ adoption through their adoption behavior.
    Keywords: Social networks, renewable energy, technology adoption, information diffusion, behavior diffusion, biogas, China
    JEL: D83 D85 Q55
    Date: 2015–02
  9. By: Andrea Tesei (Queen Mary University of London )
    Abstract: Existing studies of trust formation in U.S. metropolitan areas have found that trust is lower when there is more income inequality and greater racial fragmentation. I add to this literature by examining the role of income inequality between racial groups (racial income inequality). I find that greater racial income inequality reduces trust. Also, racial fragmentation is no longer a significant determinant of trust once racial income inequality is accounted for. I also show that racial income inequality has a more detrimental effect in more racially fragmented communities and that trust falls more in minority groups when racial income inequality increases. The results hold under both least squares and instrumental variable estimation.
    Keywords: Trust, Racial income inequality, U.S.
    JEL: D31 Z10 J15
    Date: 2015–01
  10. By: Bary S.R. Pradelski
    Abstract: Individual behaviors such as smoking, fashion, and the adoption of new products is influenced by taking account of others' actions in one's decisions.  We study social influence in a heterogeneous population and analyze the long-run behavior of the dynamics.  We distinguish between cases in which social influence arises from responding to the number of current adopters, and cases in which social influence arises from responding to the cumulative usage.  We identify the equilibria of the dynamics and show which equilibrium is observed in the long-run.  We find that the models exhibit different behaviour and hence this differentiation is of importance.  We also provide an intuition for the different outcomes.
    Keywords: social influence, imitation, equilibrium selection
    JEL: C62 C70 D70 G00
    Date: 2015–02–24

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