nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒04‒19
fourteen papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Social capital in Europe from 1990 to 2012: trends, path-dependency and convergence By Sarracino, Francesco; Mikucka, Malgorzata
  2. Social Capital, Innovation and Economic Growth By Maria Thompson
  3. Backscratching in Hierarchical Organizations By Valeria Maggian; Natalia Montinari; Antonio Nicolò
  4. Social Trust and Differential Reactions of Local and Foreign Investors to Public News By Chunxin Jia; Yaping Wang; Wei Xiong
  5. Trust and Norwegian-Russian Energy Relations By Marc Ozawa
  6. Participative political institutions and city development 800-1800 By Wahl, Fabian
  7. Trust in the Monetary Authority By Bursian, Dirk; Faia, Ester
  8. Authority and Centrality: Power and Cooperation in Social Dilemma Networks By Ramalingam, Abhijit; Rojo Arjona, David; Schram, Arthur; Van Leeuwen, Boris
  9. Relational Warm Glow and Giving in Social Groups By Sarah Smith; Kimberley Scharf
  10. Worth 1000 Words: The effect of social cues on a fundraising campaign in a government agency. A field experiment By Michael Sanders; David Reinstein
  11. A warm glow in the after life? The determinants of charitable bequests By Michael Sanders; Sarah Smith
  12. Why are heterogenous communities inefficient? Theory, history and an experiment By David Hugh-Jones and; Carlo Perroni
  13. Spontaneous order and social norms. Hayek’s theory of socio-cultural evolution By Gedeon, Péter
  14. Friendship at Work: Can Peer Effects Catalyze Female Entrepreneurship? By Erica Field; Seema Jayachandran; Rohini Pande; Natalia Rigol

  1. By: Sarracino, Francesco; Mikucka, Malgorzata
    Abstract: Social capital affects many social and economic outcomes; hence, it is important to monitor its changes over time. Previous literature on trends of social capital focused mainly on the case of US, devoting less attention to other regions of the world, such as Europe. This study uses WVS-EVS integrated data (1990-2012) to describe the trends of 10 proxies of social capital in 30 Western and Eastern European countries. The paper demonstrates that the convergence of social capital among European regions was limited, and it shows evidence of path dependency, especially in case of relational social capital.
    Keywords: social capital; convergence; path-dependency; trends; Europe; EVS WVS.
    JEL: A12 Z13
    Date: 2015–04–10
  2. By: Maria Thompson (Universidade do Minho, NIPE)
    Abstract: Multidisciplinary innovation is the engine of growth of an increasing number of economies. Innovation output depends increasingly on information sharing and cooperation between creative agents. Sharing and cooperation requires the existence of generalised trust. Social capital consists of trust and trust-based networks. Our main goal is to illustrate theoretically the importance of social capital to the growth of an innovation economy.
    Keywords: Innovation, Social Capital, Economic Growth
    JEL: O00 O31 O41
    Date: 2015
  3. By: Valeria Maggian; Natalia Montinari; Antonio Nicolò
    Abstract: In this paper we investigate the role of reciprocity in sustaining the emergence of implicit collusive agreements in hierarchical organizations. We conduct a laboratory experiment in which an agent hires, on behalf of the principal, one worker out of two candidates. The two candidates differ in their ability and, once employed, the worker chooses a level of non-contractible effort to exert in two tasks: one benefits the organization (that is both the principal and the agent) while the other one is less profitable, only benefits the agent and provides him with higher earnings. We provide evidence that: i) low ability workers are more likely to exert effort in the task that is exclusively beneficial to the agent; ii) as a consequence, agents distort the hiring process in favor of the low ability workers and iii) sharing a small part of the organization's profits with the workers alleviates their effort distortion.
    Keywords: Con ict of Interest, Effort Distortion, Profit Sharing, and Reciprocity
    JEL: C91 J50 L14 M52
    Date: 2015–04
  4. By: Chunxin Jia; Yaping Wang; Wei Xiong
    Abstract: This paper uses the segmented dual-class shares issued by several dozen Chinese firms---A shares to local Chinese investors and H shares to foreign investors---to compare reactions of local and foreign investors to the same public news. We find that local investors react more strongly to earnings forecasts by local analysts, while foreign investors react more strongly to forecasts of foreign analysts. This finding highlights social trust as a force driving people with different social backgrounds to react differently to the same information.
    JEL: F3 G02 G14
    Date: 2015–04
  5. By: Marc Ozawa
    Abstract: Trust in Norwegian-Russian energy relations is one in the making. Both sides have actively pursued to build trust, particularly over the past decade. The process has been driven by shared economic interests, the prominence of the petroleum industry in both countries, and a desire to improve political relations on both sides. Factors shaping trust are pre-existing on the one hand, and determined by the actors’ signals on the other. Different organisational and cultural preferences likewise play a role in the development of trust and degree of co-operation. This study argues that the current level of trust is neither high nor low when compared to other bi-lateral relations with Russia. While trust appears to have contributed to breakthroughs in co-operation such as the resolution of the maritime border and new joint ventures in oil exploration, a lack of trust owing to diverging interests and market forces is inhibiting collaboration in the realm of gas. This potentially puts Norway and Russia on a path to increased competition for their primary gas markets, first in Germany and then in the rest of continental Europe. As the two main gas suppliers of the EU, this suggests serious implications on the future of European gas markets, the return on investment for their upstream gas industries, and energy security in the region.
    Keywords: Trust, natural gas, oil, trade, co-operation, Norway, Russia, Europe
    Date: 2014–04–14
  6. By: Wahl, Fabian
    Abstract: This study investigates the effect of participative political institutions (PPIs) that emerged in many central European cities from the late 13th century. The empirical analysis of the paper is based on newly compiled long-run data for the existence of different types of PPIs in 104 cities in the Holy Roman Empire. The effect of both an overall index of participativeness of political institutions as well as of the individual PPIs is tested empirically. When pooled over all periods and observations, there seems to be a significant positive overall effect of PPIs in the German-speaking area but not in the Low Countries. The study founds considerable spatial and temporal heterogeneity in the effect of PPIs. Furthermore, the effect of different types of PPIs differs substantially and in general seems to be short-lived. That is, the results show that the positive initial effect of some PPIs declined the longer they existed and over time.
    Keywords: Medieval Period,Early-Modern Period,Central Europe,City Development,Political Institutions,Early Democracy,Guilds
    JEL: N44 N94 O10 R11 H11 D72
    Date: 2015
  7. By: Bursian, Dirk; Faia, Ester
    Abstract: Trust in policy makers fluctuates significantly over the cycle and affects the transmission mechanism. Despite this it is absent from the literature. We build a monetary model embedding trust cycles; the latter emerge as an equilibrium phenomenon of a game-theoretic interaction between atomistic agents and the monetary authority. Trust affects agents' ’stochastic discount factors, namely the price of future risk, and through this it interacts with the monetary transmission mechanism. Using data from the Eurobarometer surveys, we analyze the link between trust and the transmission mechanism of macro and monetary shocks. Empirical results are in line with theoretical ones.
    Keywords: betrayal aversion; monetary transmission system; trust games
    JEL: C7 C8 E0 E5 G12
    Date: 2015–04
  8. By: Ramalingam, Abhijit; Rojo Arjona, David; Schram, Arthur; Van Leeuwen, Boris
    Abstract: We investigate the effects of power on cooperation in repeated social dilemma settings. Groups of five players play either multi-player trust games or VCM-games on a fixed network. Power stems from having the authority to allocate funds raised through voluntary contributions by all members and/or from having a pivotal position in the network (centrality). We compare environments with and without ostracism by allowing players in some treatments to exclude others from further participation in the network. Our results show that power matters but that its effects hinge strongly on the type involved. Reminiscent of the literature on leadership, players with authority often act more cooperatively than those without such power. Nevertheless, when possible, they are quickly ostracized from the group. Thus, this kind of power is not tolerated by the powerless. In stark contrast, centrality leads to less cooperative behavior and this free riding is not punished; conditional on cooperativeness, players with power from centrality are less likely to be ostracized than those without. Hence, not only is this type of power tolerated, but so is the free riding it leads to.
    Keywords: power, cooperation, networks, public goods
    JEL: C91 D02 D03 H41
    Date: 2015–03
  9. By: Sarah Smith; Kimberley Scharf
    Abstract: We study charitable giving within social groups. Exploiting a unique dataset, we establish three key relationships between social group size and fundraising outcomes: (i) a positive relationship between group size and the total number of donations; (ii) a negative relationship between group size and the amount given by each donor; (iii) no relationship between group size and the total amount raised by the fundraiser. We rule out classic free-riding to explain these relationships since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by “relational” warm glow.
    Keywords: Online giving; Fundraising; Social groups; Donations; Charity; Warm glow
    JEL: D64 Z1 H31
    Date: 2014–06
  10. By: Michael Sanders; David Reinstein
    Abstract: Giving has been shown by many studies to be a social phenomenon. However, while people may desire to conform to the donation of others, it is unclear how fundraisers should take advantage of this. In this paper we conduct a field experiment in a workplace, in which employees are sent prominent messages from a colleague who is already a donor. We find that signups for workplace giving more than double when a picture of the existing donor is displayed, relative to a message without a picture.
    Keywords: Fundraising, charitable giving, peer effects; donations
    JEL: C93 D03 D64
    Date: 2014–05
  11. By: Michael Sanders; Sarah Smith
    Abstract: Using a unique field experiment we show that prompts to leave money to charity during the will-making process substantially increase the probability of making a bequest. Asking if the donor wants to leave money to charity doubles the proportion making a bequest; adding emotional and social cues trebles it. The responses are strongest among childless people. We compare the effects of the prompts to the effect of an estates tax. Our results suggest that both economic and non-pecuniary incentives similarly affect whether people leave money to charity, but are less effective where people have strong preferences for other bequests.
    Keywords: charitable giving; charitable bequests; prompts; social norms
    JEL: D64 H24 H41
    Date: 2014–06
  12. By: David Hugh-Jones and (University of East Anglia); Carlo Perroni (University of Warwick)
    Abstract: We examine why heterogenous communities may fail to provide public goods. Current work characterizes sanctioning free-riders as an under-supplied public good. We argue that often free-riders can be punished by the coordinated action of a group. This punishment can be profitable, and need not be undersupplied. But the power to expropriate defectors can also be used to expropriate outgroups. Heterogenous societies may be inefficient because minorities, rather than free-riders, are expropriated. Even if this is not so, groups’ different beliefs about the reasons for expropriation may make the threat of punishment less effective at preventing free-riding. We illustrate our theory with evidence from California mining camps, contemporary India, and US schools. In a public goods experiment using minimal groups and a profitable punishment institution, outgroups were more likely to be punished, and reacted differently to punishment than ingroup members.
    Keywords: Group Coercion, Social Heterogeneity
    Date: 2015
  13. By: Gedeon, Péter
    Abstract: Hayek's theory of socio-cultural evolution is a generalization of his theory on spontaneous market order. Hayek explains both the emergence of market and social institutions serving as a social basis for that order within the framework of a unified evolutionary logic. This logic interprets the emergence and survival of spontaneous order and group-level rules of conduct as an unintended consequence of human action. In order to explain the emergence of social norms exclusively on the basis of methodological individualism, one would have to give up an exclusively evolutionary explanation of these norms. Since Hayek applies the invisiblehand explanation to the investigation of social norms, he combines the position of methodological individualism with functionalist-evolutionary arguments in his analysis. Hayek's theory of socio-cultural evolution represents a theory in the framework of which methodological individualism and functionalism do not crowd out but complement each other.
    Keywords: socio-cultural evolution, invisible-hand explanations, spontaneous market order, social norms, methodological individualism, functionalism
    JEL: A13 B25 B52 B53
    Date: 2015
  14. By: Erica Field; Seema Jayachandran; Rohini Pande; Natalia Rigol
    Abstract: Does the lack of peers contribute to the observed gender gap in entrepreneurial success, and is the constraint stronger for women facing more restrictive social norms? We offered two days of business counseling to a random sample of customers of India’s largest women’s bank. A random subsample was invited to attend with a friend. The intervention had a significant immediate impact on participants’ business activity, but only if they were trained in the presence of a friend. Four months later, those trained with a friend were more likely to have taken out business loans, were less likely to be housewives, and reported increased business activity and higher household income. The positive impacts of training with a friend were stronger among women from religious or caste groups with social norms that restrict female mobility.
    JEL: O0
    Date: 2015–04

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