nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒06‒05
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Natural Experiments in Macroeconomics By Fuchs-Schündeln, Nicola; Hassan, Tarek
  2. Economic Development: Is Social Capital Persistent? By Rakesh N R Gupta
  3. Does Ethnic Diversity Affect Social Capital in the Russian Context? By Alexander Tatarko; Anna Mironova; Segey Chuvashov
  4. An Experimental Study of Persuasion Bias and Social Influence in Networks By Jordi Brandts; Ayça Ebru Giritligil; Roberto A. Weber
  5. Social Networks and Economic Life in Rural Zambia By Leavy, Jennifer
  6. Strategic influence in social networks By Michel Grabisch; Antoine Mandel; Agnieszka Rusinowska; Emily Tanimura
  7. Teams, Organization and Education Outcomes: Evidence from a field experiment in Bangladesh By Hahn, Youjin; Islam, Asadul; Patacchini, Eleonora; Zenou, Yves
  8. Social Identity and Social Free-Riding By Mark Bernard; Florian Hett; Mario Mechtel
  9. Trust-building in international business ventures By Alexandra Gerbasi; Dominika Latusek
  10. The roles of human values and generalized trust on stated preferences when food is labeled with environmental footprints: insights from Germany By Grebitus, Carola; Steiner, Bodo; Veeman, Michele

  1. By: Fuchs-Schündeln, Nicola; Hassan, Tarek
    Abstract: A growing literature relies on natural experiments to establish causal effects in macroeconomics. In diverse applications, natural experiments have been used to verify underlying assumptions of conventional models, quantify specific model parameters, and identify mechanisms that have major effects on macroeconomic quantities but are absent from conventional models. We discuss and compare the use of natural experiments across these different applications and summarize what they have taught us about such diverse subjects as the validity of the Permanent Income Hypothesis, the size of the fiscal multiplier, and about the effects of institutions, social structure, and culture on economic growth. We also outline challenges for future work in each of these fields, give guidance for identifying useful natural experiments, and discuss the strengths and weaknesses of the approach.
    Keywords: Civic Capital; Fiscal Multiplier; Institutions; Multiple Equilibria; Networks; Permanent Income Hypothesis; Social Structure; Social Ties; Trust
    JEL: C1 C9 E21 E62 H31 O11 O14 O43 O50
    Date: 2015–05
  2. By: Rakesh N R Gupta (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, Essec Business School)
    Abstract: This paper, on the one hand, goes a step closer to demonstrate the causality of social capital on economic performance. On the other hand, we confirm a continued role of social capital effects on economic performance in this paper by using a much larger sample, spanning three decades and increasing the scope of countries. This paper is unique in the sense that it contributes to revisiting questions of economic performance, social capital and institutions with a clearly better and updated dataset from the last 28 years building upon existing empirical evidence. We employ a longitudinal analysis (pooled unbalanced multiple cross-section datasets) with fixed effects in this study. Our sample includes both the World Values Survey and European Values Study dating back to the 1980s. Our results are twofold: Firstly, to confirm that trust has a significant positive effect on growth. And more importantly, they have a significant effect on growth for at least 5 years (for growth at 5, 7 and 10 years following a period of trust measure). Secondly, associational activities – another measure in the overarching definitions of social capital, along with institutions, inequality, and education are consistently significant determinants of trust.
    Date: 2015–01
  3. By: Alexander Tatarko (National Research University Higher School of Economics); Anna Mironova (National Research University Higher School of Economics); Segey Chuvashov (National Research University Higher School of Economics)
    Abstract: The research considers the impact of ethnic diversity on social capital in the Russian context. The theoretical study is based on Putnam’s hypothesis related to the impact of ethnic diversity on social capital. The empirical basis of a representative survey was compiled in two multicultural regions of Russia (N = 2061). To assess the level of ethnic diversity an Ethnic Diversity Index (EDI) was calculated based on the results of the latest National Population Census. Data were processed using two-level structural equitation modelling. The results showed that ethnic diversity did not affect adversely the social capital of Russia, as assumed in Putnam’s hypothesis. In particular, Russia's ethnic diversity positively influences ethnic tolerance and informal sociability and does not affect social trust and community organizational life. The article also suggests reasons for these results
    Keywords: social capital, ethnic diversity, social trust, community organizational life, informal sociability, ethnic tolerance
    JEL: D85 Z13
    Date: 2015
  4. By: Jordi Brandts; Ayça Ebru Giritligil; Roberto A. Weber
    Abstract: In many areas of social life, individuals receive information about a particular issue of interest from multiple sources. When these sources are connected through a network, then proper aggregation of this information by an individual involves taking into account the structure of this network. The inability to aggregate properly may lead to various types of distortions. In our experiment, four agents all want to find out the value of a particular parameter unknown to all. Agents receive private signals about the parameter and can communicate their estimates of the parameter repeatedly through a network, the structure of which is known by all players. We present results from experiments with three different networks. We find that the information of agents who have more outgoing links in a network gets more weight in the information aggregation of the other agents than under optimal updating. Our results are consistent with the model of “persuasion bias” of DeMarzo et al. (2003).
    Keywords: persuasion bias, experiments, bounded rationality
    JEL: C92 D03 D83
    Date: 2015–05
  5. By: Leavy, Jennifer
    Abstract: This thesis explores the relationship between social networks and economic life in rural Zambia. The motivation for the study lies in the crucial role played by social context and social networks in exchange behaviour in rural sub-Saharan Africa, and inherent difficulties in formalising market transactions in this context within a standard neoclassical economics framework. The study examines the role of social networks in rural production systems, focusing on crop market participation. It is based on analysis of findings from social network research conducted by the author in three predominantly Bemba villages in Northern Province, Zambia. Data collected using quantitative and qualitative methods are used to map social networks of individuals and households. Variables are constructed capturing network characteristics, and incorporated into transactions cost models of ommercialisation. The overarching question is: do social networks play a role in determining farming success in settings with little variability between households on assets and endowments – land, labour, inputs – and where markets are incomplete or missing? Do social networks mediate market and resource access, helping to explain socio-economic differences between households? The research finds rural life is characterised by diverse networks with multiple, overlapping functions. Much economic exchange takes place on reciprocal or kinship bases, rooted in social norms and reflecting community structures. How social networks are measured matters. Different network attributes are important for different people, and relationships between networks and outcomes depend on the measure used. Controlling for endogeneity, estimation results suggest larger networks have a negative effect on crop incomes whereas having a greater proportion of kin in the network has a positive effect, implying that in this context strong ties are key. Qualitative research suggests the nature of people’s networks and their positions within them play an important role in the command over labour: “the famous always get their work done"
  6. By: Michel Grabisch (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Antoine Mandel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Emily Tanimura (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: We consider a model of influence with a set of non-strategic agents and two strategic agents. The non-strategic agents have initial opinions and are linked through a simply connected network. They update their opinions as in the DeGroot model. The two strategic agents have fixed opinions, 1 and 0 respectively, and are characterized by the magnitude of the impact they can exert on non-strategic agents. Each strategic agent forms a link with one non-strategic agent in order to alter the average opinion that eventually emerges in the network. This procedure defines a zero-sum game whose players are the two strategic agents and whose strategy set is the set of non-strategic agents. We focus on the existence and the characterization of equilibria in pure strategy in this setting. Simple examples show that the existence of a pure strategy equilibrium does depend on the structure of the network. The characterization of equilibrium we obtain emphasizes on the one hand the influenceability of target agents and on the other hand their centrality whose natural measure in our context defines a new concept, related to betweenness centrality, that we call intermediacy. We also show that in the case where the two strategic agents have the same impact, symmetric equilibria emerge as natural solutions whereas in the case where the impacts are uneven, the strategic players generally have differentiated equilibrium targets, the high-impacts agent focusing on centrality and the low-impact agent on influenceability.
    Abstract: Nous considérons un modèle d'influence avec un ensemble d'agents non-stratégiques et deux agents stratégiques. Les agents non-stratégiques sont liés par un réseau simplement convexe et leurs opinions évoluent comme dans le modèle de DeGroot. Les deux agents stratégiques ont des opinions fixes, respectivement 1 et 0, et sont caractérisés par l'impact qu'ils exercent sur les croyances des agents non-stratégiques. Chaque agent stratégique forme exactement un lien avec un agent non-stratégique en vue d'influencer l'opinion moyenne limite qui se forme dans le réseau. Cette procédure définie un jeu à somme nulle où les ensembles de stratégie des deux joueurs sont l'ensemble des agents non-stratégiques. Nous nous intéressons à l'existence et à la caractérisation des équilibres de Nash en stratégie pure dans ce cadre. Des exemples simples montrent que l'existence d'équilibres en stratégie pure dépend de la structure du réseau. La caractérisation des équilibres que nous obtenons met en avant d'une part l'influençabilité et d'autre part l'influence des agents cibles que nous mesurons à travers un nouveau concept mesurant l'intermédiation effectuée par un agent.
    Date: 2015–01
  7. By: Hahn, Youjin; Islam, Asadul; Patacchini, Eleonora; Zenou, Yves
    Abstract: We study the relationship between network centrality and educational outcomes using a field experiment in primary schools in Bangladesh. After obtaining information on friendship networks, we randomly allocate students into groups and give them individual and group assignments. We find that the groups that perform the best are those whose members have high Katz-Bonacich and key-player centralities. Leaders are mostly responsible for this effect, while bad apples have little influence. Group members' network centrality is also important in shaping individual performance. We show that network centrality captures non-cognitive skills, especially patience and competitiveness.
    Keywords: leaders; Network centrality; soft skills; team work
    JEL: A14 C93 D01 I20
    Date: 2015–05
  8. By: Mark Bernard (Department of Management and Microeconomics, Goethe University Frankfurt); Florian Hett (Department of Management and Microeconomics, Goethe University Frankfurt); Mario Mechtel (Institute for Labour Law and Industrial Relations in the EU, University of Trier)
    Abstract: We model individual identification choice as a strategic group formation problem. When choosing a social group to identify with, individuals appreciate high social status and a group stereotype to which they have a small social distance. A group's social status and stereotype are shaped by the (exogenous) individual attributes of its members and hence endogenous to individuals' choices. Unless disutility from social distance is strong enough, this creates a strategic tension as individuals with attributes that contribute little to group status would like to join high-status groups, thereby diluting the latters' status and changing stereotypes. Such social free-riding motivates the use of soft exclusion technologies in high-status groups, which provides a unifying rationale for phenomena such as hazing rituals, charitable activities or status symbols that is not taste-based or follows a standard signaling mechanism.
    Keywords: social identity, social status, social distance, categorization, group formation
    JEL: Z13 D01 D03
    Date: 2015–05
  9. By: Alexandra Gerbasi (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Dominika Latusek (Department of Management - Kozminski University)
    Abstract: Purpose: This article investigates collaboration and coordination practices in the organization whose members come from two countries that differ dramatically in generalized trust: Poland and the United States. Design/methodology/approach: A qualitative field study conducted in Silicon Valley-based American-Polish start-up joint venture. Findings: There are three mechanisms can facilitate collaboration in organizations that differ in generalized trust: frequent interaction that may form a basis for knowledge-based trust, professional cultures that provide common platform for communication, and the presence of intermediaries that possess understanding and ability to communicate of both cultures. Practical implications: The findings can be applied in the context of offshoring projects in knowledge intensive industries. Originality/value: Research presented in this paper investigates collaboration of parties from low-trust and high-trust cultures within one business venture.
    Date: 2015
  10. By: Grebitus, Carola; Steiner, Bodo; Veeman, Michele
    Abstract: This study explores influences of human values and trust on stated preferences for food labeled with environmental footprints. We apply survey data to assess influences of these individual-specific characteristics on German consumers’ stated choices of potatoes, through an attribute-based choice experiment in which product alternatives are described by footprint labels and prices. We find that accounting for consumers’ value systems, but not generalized trust beliefs, aids in understanding choices and identifying possible markets for footprint-labeled food products.
    Keywords: carbon footprint, ecological, Rokeach Value Survey, environmental sustainability, mixed logit
    JEL: C25 C9 M31 Q5
    Date: 2014

This nep-soc issue is ©2015 by Fabio Sabatini. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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