nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒03‒13
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Social capital, political connections, and household enterprises: Evidence from Vietnam By Kinghan, Christina; Newman, Carol
  2. Who’s listening? Heterogeneous Impact of Social Interaction on Individuals’ Stock Market Participation By Zetterdahl, Emma; Hellström, Jörgen
  3. Cooperation and Trustworthiness in Repeated Interaction By Cagala, Tobias; Glogowsky, Ulrich; Grimm, Veronika; Rincke, Johannes
  4. In Good Company – Neighborhood Quality and Female Employment By Peggy Bechara; Lea Eilers; Alfredo R. Paloyo
  5. Investing in Low-Trust Countries: Trust in the Global Mutual Fund Industry By Massa, Massimo; Wang, Chengwei; Zhang, Hong; Zhang, Jian
  6. Within-group heterogeneity and group dynamics: Analyzing exit of microcredit groups in Angola By Ivar Kolstad; Armando J. Garcia Pires; Arne Wiig
  7. Gender differences in the distribution of total work-time of Latin- American families: the importance of social norms By Campaña, Juan Carlos; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
  8. "Incentives and Social Preferences: Experimental Evidence from a Seemingly Inefficient Traditional Labor Contract" By Jun Goto; Yasuyuki Sawada; Takeki Aida; Keitaro Aoyagi
  9. A hierarchical network formation model By Atabati, Omid; Farzad, Babak
  10. Information networks among women and men and the demand for an agricultural technology in India: By Magnan, Nicholas; Spielman, David J.; Gulati, Kajal; Lybbert, Travis J.
  11. Treasure Hunt: Social Learning in the Field By Markus Mobius; Tuan Phan; Adam Szeidl
  12. Doing good with other people’s money: an experiment on people's (un)willingness to grant others the freedom to choose By Fredrik Carlsson; Mitesh Kataria; Elina Lampi; Maria Vittoria Levati

  1. By: Kinghan, Christina; Newman, Carol
    Abstract: Social capital and political connections can play an important role in developing countries where markets fail and institutions are weak. This paper explores their role in household micro-enterprise operation and success in the rural low-income setting of
    Keywords: social capital, political connections, household enterprises, Vietnam
    Date: 2015
  2. By: Zetterdahl, Emma (Department of Economics, Umeå School of Business and Economics); Hellström, Jörgen (Umeå School of Business and Economics)
    Abstract: Novel evidence is provided indicating that the influence from family (parents and partners) and peer social interaction on individuals’ stock market participation vary over different types of individuals. Focusing on distinct features of concern for the social interaction process, results imply that individuals’ exposure to, and valuation of, stock market related social signals are of importance and thus, contribute to the understanding of the heterogeneous influence of social interaction. Overall, the results are interesting and enhance the understanding of the underlying mechanisms of social interaction on individuals’ financial decision making.
    Keywords: Investor behavior; family effects; peer effects; financial literacy; social trust
    JEL: D03 D14 D83 G02 G11
    Date: 2015–03–11
  3. By: Cagala, Tobias; Glogowsky, Ulrich; Grimm, Veronika; Rincke, Johannes
    Abstract: Public goods provision often involves groups of contributors repeatedly interacting with administrators who can extract rents from the pool of contributions. We suggest a novel identification approach that exploits the sequential ordering of decisions in a panel vector autoregressive model to study social interactions in the laboratory. Despite rent extraction, contributors and administrators establish a stable interaction with cooperation matching the level from a comparable Public Goods Game. In the short run, temporary changes in behavior trigger substantial behavioral multiplier effects. We demonstrate that cooperation breeds trustworthiness and vice versa and that one-time disruptions are particularly damaging in settings with a lack of cooperative attitudes and trust.
    Keywords: Cooperation,trustworthiness,rent extraction,methods for laboratory experiments,panel vector autoregressive model
    JEL: C32 C91 C92 H41
    Date: 2015
  4. By: Peggy Bechara; Lea Eilers; Alfredo R. Paloyo
    Abstract: Using a uniquely assembled panel dataset, we estimate the impact of neighborhood and peer effects on female labor supply. Nonrandom sorting and unobserved heterogeneity at the individual and neighborhood levels make recovering these impact parameters more complicated in the absence of (quasi-)experimental variation in neighborhood attributes. Our estimation strategy rests on using a hedonic pricing model to control for neighborhood-level unobserved heterogeneity and using a fixed-effects approach to account for the correlation induced by individual time-invariant unobservables. The results suggest that women’s participation behavior is significantly associated with peer and neighborhood attributes. The extensive margin is driven by the average female employment rate; the intensive margin is driven by the average share of fulltime employed females in the neighborhood. These relationships are stronger in the subsample of mothers. However, these statistically significant associations do not survive when we control for individual time-invariant unobservable heterogeneity.
    Keywords: Neighborhood effects; female labor supply; social interactions; peer effects
    JEL: R23 J13 J22
    Date: 2014–12
  5. By: Massa, Massimo; Wang, Chengwei; Zhang, Hong; Zhang, Jian
    Abstract: We hypothesize that trust plays an important role in affecting the activeness and effectiveness of the global mutual fund industry. Empirically, trust is positively associated with the activeness of domestic funds, whereas for internationals mutual funds conducting cross-border investments activeness is bounded by the trust of low-trust countries. In both cases, trust-related active share delivers superior performance, whereas the economic magnitude is larger for cross-border investments (around 2% per year). Our results suggest that trust, including both trust in managers and trust in the market, may significantly affect the development of financial intermediaries and the efficiency of global investment.
    Keywords: International Investments; Mutual Funds; Performance; Trust
    JEL: G23
    Date: 2015–03
  6. By: Ivar Kolstad; Armando J. Garcia Pires; Arne Wiig
    Abstract: The effect of within-group heterogeneity on the survival of social groups is theoretically ambiguous. A greater diversity of ideas, experience, and networks can have a positive effect on members’ benefits from group membership, but diversity also creates a potential for conflict. This paper presents an analysis of the exit of microcredit groups, using data from Angola. The results suggest that group fragmentation in terms of social identities, or more specifically religious fractionalization, is associated with a greater probability of group exit. Results for within-group economic inequality suggest, however, that inequality is associated with a decrease in the probability of exit, but at a diminishing rate.
    Keywords: Group dynamics, microcredit, fractionalization, inequality, exit
    Date: 2015
  7. By: Campaña, Juan Carlos; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
    Abstract: We analyze differences by gender in the time dedicated to total work (paid and unpaid) by families in Latin America, with particular attention to the effect of social norms. To this end, we use survey data on time use in Mexico (2009), Peru (2010), Ecuador (2012) and Colombia (2012), to estimate differential equations through OLS. Our results reveal differences between countries in terms of the gender distribution of total work (paid work plus unpaid work), with Colombia and Peru being more equitable. These two countries could be approaching a situation of "iso-work", or equality of work, in the sense that men and women spend similar amounts of time in total work. When considering the social norms that explain gender differences in the time spent in total work, we use data from the last wave (2010-2014) of the World Values Survey (WVS). Our results indicate that the more egalitarian countries exhibit the highest levels of equality in the distribution of work. It is important to know how men and women from these four countries distribute their time in total work, in order to understand why there are clear differences by gender.
    Keywords: Total work, Latin America, differences by gender, social norms.
    JEL: D13 J13 J16 J22
    Date: 2015–03–10
  8. By: Jun Goto (Institute of Economic Research,Center for Economic Institutions); Yasuyuki Sawada (Faculty of Economics, The University of Tokyo); Takeki Aida (National Graduate Institute for Policy Studies (GRIPS)); Keitaro Aoyagi (Faculty of Economics, The University of Tokyo)
    Abstract: This paper investigates the interplay between economic incentives and social norms in formulating rice planting contracts in the Philippines. In our study area, despite the potential for pervasive opportunistic behaviors by workers, a fixed-wage (FW) contract has been dominant for rice planting. To account for the use of this seemingly inefficient contractual arrangement, we adopt a hybrid experimental method of framed field experiments by randomized controlled trials (RCT), in which we randomly assign three distinct labor contracts—FW, individual piece rate (IPR), and group piece rate (GPR)—and artefactual field experiments to elicit social preference parameters. Through analyses of individual workers’ performance data from framed field experiments and data on social preferences elicited by artefactual field experiments, three main empirical findings emerge. First, our basic results show the positive incentive effects in IPR and, equivalently, moral hazard problems in FW, which are consistent with standard theoretical implications. Second, non-monetary incentives seem to play a significant role under FW: while social preferences such as altruism and guilt aversion play an important role in stimulating incentives under FW, introducing monetary incentives crowds out such intrinsic motivations, and other nonmonetary factors such as positive peer effects significantly enhance incentives under a FW contract. Finally, as alternative hypotheses, our empirical results are not necessarily consistent with the hypothesis of the interlinked contract of labor and credit transactions in mitigating moral hazard problems, the optimality of FW contract under large effort measurement errors, and the intertemporal incentives arising from performance-based contract renewal probabilities. Hence, considering the interplay of intrinsic motivations and monetary incentives as well as the monetary costs of mitigating moral hazard and free-riding problems through IPR, we may conclude that seemingly perverse traditional contractual arrangements might be socially efficient. --
    Date: 2015–03
  9. By: Atabati, Omid; Farzad, Babak
    Abstract: We present a network formation model based on a particularly interesting class of networks in social settings, where individuals' positions are determined according to a topic-based or hierarchical taxonomy. In this game-theoretic model, players are located in the leaves of a complete b-ary tree as the seed network with the objective of minimizing their collective distances to others in the network. In the grid-based model of Even-Dar and Kearns [3], they demonstrate the existence of small diameter networks with the threshold of a = 2 where the cost of a new link depends on the distance between the two endpoints to the power of a. We show the appearance of small diameter equilibrium networks with the threshold of a = 1/4 in the hierarchical or tree-based networks. Moreover, the general set of equilibrium networks in our model are guaranteed to exist and they are pairwise Nash stable with transfers [2].
    Keywords: Network formation; Hierarchical networks; Linking game
    JEL: C79 D85
    Date: 2015–02
  10. By: Magnan, Nicholas; Spielman, David J.; Gulati, Kajal; Lybbert, Travis J.
    Abstract: Although there is ample evidence of differences in how and where men and women acquire information, most research on learning and household decisionmaking only considers access to information for a single, typically male, household head. This assumption may be problematic in developing-country agriculture, where women play a fundamental role in farming. Using gender-disaggregated social network data from Uttar Pradesh, India, we analyze agricultural information networks among men and women. We test for gender-specific network effects on demand for laser land leveling—a resource-conserving technology—using data from a field experiment that combines a Becker-DeGroot-Marschak (BDM) auction with a lottery.
    Keywords: Agricultural technologies, Gender, Women, information, technology adoption, Developing countries, Social network analysis, peer effects, learning externalities, laser land leveling, gender disagredated data,
  11. By: Markus Mobius; Tuan Phan; Adam Szeidl
    Abstract: We seed noisy information to members of a real-world social network to study how information diffusion and information aggregation jointly shape social learning. Our environment features substantial social learning. We show that learning occurs via diffusion which is highly imperfect: signals travel only up to two steps in the conversation network and indirect signals are transmitted noisily. We then compare two theories of information aggregation: a naive model in which people double-count signals that reach them through multiple paths, and a sophisticated model in which people avoid double-counting by tagging the source of information. We show that to distinguish between these models of aggregation, it is critical to explicitly account for imperfect diffusion. When we do so, we find that our data are most consistent with the sophisticated tagged model.
    Date: 2015–03–01
  12. By: Fredrik Carlsson (Department of Economics, University of Gothenburg, Sweden); Mitesh Kataria (Department of Economics, University of Gothenburg, Sweden); Elina Lampi (Department of Economics, University of Gothenburg, Sweden); Maria Vittoria Levati (Department of Economics (University of Verona))
    Abstract: We augment a standard allocation experiment to investigate how preferences for an environmental project relate to the willingness to limit others' choices. We ask the allocator to choose his own donation level, a donation level for him and his group, and the minimum donation level for the group members (excluding the allocator). We find that donations dictated to the whole group are, on average, lower than individual donations and that this decrease is consistent with the expectations of what others would like to donate. Moreover, most allocators force the others to donate a positive, though low, amount. Thus, unlimited freedom of choice is rejected by the majority of the subjects.
    Keywords: Allocation decisions; Charitable giving; Social preferences; Freedom of choice
    JEL: C92 D64 D70
    Date: 2015–03

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