nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒10‒04
fifteen papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. A Fine Rule From a Brutish World? An Experiment on Endogenous Punishment Institution and Trust By H. Sun; M. Bigoni
  2. Social Norms and Legal Design By Bruno Deffains; Claude Fluet
  3. Hedonic Quality and Social Norms: a hybrid model of product differentiation By A. Mantovani; O. Tarola; C. Vergari
  4. Vertical Collective Action: Addressing Vertical Asymmetries in Watershed Management By Cárdenas, Juan-Camilo; Rodriguez, Luz Angela; Johnson, Nancy
  5. Should I double park or should I go? The effect of political ideology on collective action problems By Antonis Adam; Andreas C. Drichoutis; Maria Georgoula; Pantelis Kammas
  6. Social Networks, Ethnicity, and Entrepreneurship By William R. Kerr; Martin Mandorff
  7. Contracts and Trust By Bryan C. McCannon; Colleen Tokar Asaad; Mark Wilson
  8. Informal Versus Formal Search : Which Yields a Better Pay? By Semih Tumen
  9. A Quantitative Study of Social Capital in the Tertiary Sector of Kobe : Has Social Capital Promoted Economic Reconstruction Since the Great Hanshin Awaji Earthquake? By Shimada, Go
  10. Social Interactions in Job Satisfaction By Semih Tumen; Tugba Zeydanli
  11. Short- and Long-run Effects of External Interventions on Trust By Igor Asanov; Simone Vannuccini
  12. Education as investment, consumption or adapting to social norm: Implications for educational mismatch among graduates By SELLAMI, Sana; VERHAEST, Dieter; NONNEMAN, Walter; VAN TRIER, Walter
  13. Dishonesty and Selection into Public Service in Denmark: Who Runs the World’s Least Corrupt Public Sector? By Sebastian Barfort; Nikolaj Harmon; Frederik Hjorth; Asmus Leth Olsen
  14. Liberty, Religiosity, and Effort By Esteban, Joan Maria; Levy, Gilat; Mayoral, Laura
  15. Racial Discrimination in Local Public Services: A Field Experiment in the US By Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos

  1. By: H. Sun; M. Bigoni
    Abstract: By means of a laboratory experiment, we study the impact of the endogenous adoption of a collective punishment mechanism within a one-shot binary trust game. The experiment comprises three games. In the first one, the only equilibrium strategy is not to trust, and not to reciprocate. In the second we exogenously introduce a sanctioning rule that imposes on untrustworthy second-movers a penalty proportional to the number of those who reciprocate trust. This generates a second equilibrium where everybody trusts and reciprocates. In the third game, the collective punishment mechanism is adopted through majority-voting. In line with the theory, we find that the exogenous introduction of the punishment mechanism significantly increases trustworthiness, and to a lesser extent also trust. However, in the third game the majority of subjects vote against it: subjects seem to be unable to endogenously adopt an institution which, when exogenously imposed, proves to be efficiency enhancing.
    JEL: C72 C92 D72
    Date: 2015–09
  2. By: Bruno Deffains; Claude Fluet
    Abstract: We compare fault-based and strict liability offences in law enforcement when behavior is influenced by informal prosocial norms of conduct. Fault tends to be more effective than strict liability in harnessing social or self-image concerns. When enforcement relies on fines and assessing fault is not too costly, the optimal legal regime is fault-based with a standard consistent with the underlying social norm if convictions would seldom occur under optimal enforcement; otherwise liability should be strict. When sanctions are nonmonetary or when stigmatization imposes a deadweight loss, the legal standard may be harsher or more lenient than the social norm.
    Keywords: Social preferences, regulatory offences, law enforcement, strict liability, fault, legal standard, compliance, deterrence
    JEL: D8 K4 Z13
    Date: 2015
  3. By: A. Mantovani; O. Tarola; C. Vergari
    Abstract: We analyse how strategic competition between a green firm and a brown competitor develops when their products are differentiated along two dimensions: hedonic quality and environmental quality. The former dimension refers to the pure (intrinsic) performance of the good, whereas the latter dimension has a positional content: buying green goods satisfies the consumers’ desire to be socially worthy citizens. Product variants thus comply at different levels with "green" social norms. Consumer preferences depend on a combination of hedonic quality and compliance with social norms. Assuming that the high hedonic quality variant complies less with these norms than the low hedonic quality variant, we characterize different equilibrium configurations which appear as a result of both the intensity of such norms and the willingness to pay for the hedonic quality. Afterwards, we discuss the policy implications of our analysis.
    JEL: D62 L13
    Date: 2015–09
  4. By: Cárdenas, Juan-Camilo; Rodriguez, Luz Angela; Johnson, Nancy
    Abstract: Watersheds and irrigation systems have the characteristic of connecting people vertically by water flows. The location of users along these systems defines their role in the provision and appropriation of water which adds complexity to the potential for cooperation. Verticality thus imposes a challenge to collective action. This paper presents the results of field experiments conducted in four watersheds of Colombia (South America) and Kenya (East Africa) to study the role that location plays in affecting trust and cooperation in decisions regarding to provision and appropriation of water. We recruited 639 watersheds inhabitants from upstream, midstream and downstream locations in these basins and conducted two field experiments: the Irrigation Game and the Water Trust Game. The Irrigation Game (Cardenas et al, 2013; Janssen et al, 2011) involves decisions regarding to the provision and appropriation of water where the location in the system is randomly assigned. The Water Trust Game is an adaptation of the trust game (Berg et al 1995) framed around water and economic compensation flows where we explicitly reveal the actual upstream or downstream location of the two players. The results of the two games show that location affect water provision and distribution and that reciprocity and trust are key motivations for upstream-downstream cooperation. Yet, both experiments also suggest that the lack of trust from downstream players towards upstream players may restrict the possibilities of cooperation among watershed users.
    Keywords: Collective Action, Verticality, Watersheds, Field Experiments, Irrigation Game, Trust Game, Water Trust Game, Payments for Environmental Services, Colombia, Kenya., Environmental Economics and Policy, Productivity Analysis, Q0, Q2, C9,
    Date: 2015–01
  5. By: Antonis Adam (Department of Economics, University of Ioannina,); Andreas C. Drichoutis (Department of Agricultural Economics and Rural Development, Agricultural University of Athens); Maria Georgoula (Department of Economics, University of Ioannina,); Pantelis Kammas (Department of Economics, University of Ioannina,)
    Abstract: Collective action problems, such as double parking behavior, are pervasive in everyday life. This paper presents the results from a field survey that was carried out at one of the main and busiest streets of the city of Ioannina in Greece, in order to investigate the effect of political ideology on double parking behavior. We find that individuals placing themselves either on the extreme Left or the extreme Right on a [0-10] political spectrum, are characterized by increased propensity of double parking behavior. Taking into account that both the extreme Left and the extreme Right Greek parties are strongly in favor of state intervention, our empirical fndings could be read as follows. Subjects that believe in the superiority of state intervention rely heavier on incentives and constraints provided by the law and therefore in the absence of an effective monitoring mechanism they fail to internalize the social cost of their actions. In contrast, subjects that are in favor of decentralized market solutions, take into account the social impact of their actions even in the absence of a strong monitoring state mechanism.
    Keywords: Collective Action; Political Ideology; Political Behavior
    JEL: H23 H41 C93
    Date: 2015
  6. By: William R. Kerr; Martin Mandorff
    Abstract: We study the relationship between ethnicity, occupational choice, and entrepreneurship. Immigrant groups in the United States cluster in specific business sectors. For example, Koreans are 34 times more likely than other immigrants to operate dry cleaners, and Gujarati-speaking Indians are 108 times more likely to manage motels. We develop a model of social interactions where non-work relationships facilitate the acquisition of sector-specific skills. The resulting scale economies generate occupational stratification along ethnic lines, consistent with the reoccurring phenomenon of small, socially-isolated groups achieving considerable economic success via concentrated entrepreneurship. Empirical evidence from the United States supports our model's underlying mechanisms.
    JEL: D21 D22 D85 F22 J15 L14 L26 M13
    Date: 2015–09
  7. By: Bryan C. McCannon (West Virginia University, College of Business and Economics); Colleen Tokar Asaad (Baldwin-Wallace University); Mark Wilson (Saint Bonaventure University)
    Abstract: Social preferences and third-party enforcement of formal contracts are two mechanisms that facilitate performance of an agreement. The standard argument is that formal contracting substitutes when social preferences are lacking. We explore the hypothesis that social preferences and contract enforcement are complements. We measure social preferences from a Trust Game and use it is an explanatory variable in a contract game. We find that both increased contract enforcement and high trusting preferences lead to enhanced rates of contract formation and larger investments. There is an interaction effect where trusting individuals make larger investment agreements, specifically when enforcement is greater. Thus, contracts and social preferences complement one another.
    Keywords: contract, experiment, risk, social preference, trust
    JEL: D86 K12 C91
    Date: 2015–05
  8. By: Semih Tumen
    Abstract: Estimates on the effect of job contact method—i.e., informal versus formal search—on wage offers vary considerably across studies, with some of them finding a positive correlation between getting help from informal connections and obtaining high-paying jobs, while others finding a negative one. In this paper, I theoretically investigate the sources of discrepancies in these empirical results. Using a formal job search framework, I derive an equilibrium wage distribution which reveals that the informal search yields for some groups higher and for some others lower wages than formal search. The key result is the existence of nonmonotonicities in wage offers. Two potential sources of these nonmonotonicities exist : (i) peer effects and (ii) unobserved worker heterogeneity in terms of the inherent cost of maintaining connections within a productive informal network. The model predicts that a greater degree of unobserved heterogeneity tilts the estimates toward producing a positive correlation between informal search and higher wages, whereas stronger peer influences tend to yield a negative correlation. This conclusion informs the empirical research in the sense that identification of the true correlation between job contact methods and wage offers requires a careful assessment of the unobserved heterogeneity and peer influences in the relevant sample.
    Keywords: Job search, Informal networks, Peer effects, Heterogeneity
    JEL: D85 J31 J64
    Date: 2015
  9. By: Shimada, Go
    Abstract: Social capital is thought to have both positive and negative aspects. This paper examines how social capital has worked in the process of recovery and reconstruction in Kobe since the Great Hanshin Awaji Earthquake. The paper focuses on the tertiary sector of Kobe because since the earthquake there has been a structural shift from the secondary sector due to the damage caused by the earthquake, and because the sector accounted for 80% of employment, the most important factor for reconstruction in the mid- and long-term. The paper proves that both bonding and bridging social capital are important factors for employment. This finding provides empirical evidence for the on-going debate on how to rebuild Tohoku.
    Keywords: Social capital , SMEs (Small Medium Enterprises) , Natural disasters , Panel data analysis , Kobe
    Date: 2014–03–05
  10. By: Semih Tumen; Tugba Zeydanli
    Abstract: The literature documents that job satisfaction is positively correlated with worker performance and productivity. 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–region cells). Implementing an original empirical strategy to identify spillover effects, we find that one standard deviation increase in aggregate job satisfaction 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
  11. By: Igor Asanov (Department of Economics, University of Kassel); Simone Vannuccini (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: We experimentally analyze the effects of external interventions such as subsidy and targeting on investment decisions during the intervention and after. We employ a multi-period version of the trust (investment) game (Berg et al., 1995) introducing either the monetary incentives for contribution or providing a suggestion about the level of investment. The results of the experiment indicate that targeting is an effective instrument to promote trustful behavior, whereas subsidy policy is not effective both in short- and long-run. Therefore we suggest considering a targeting policy as one of the instruments that can foster trustful behavior.
    Keywords: Trust Game, Experiment, Policy, Subsidy, Academic Spin-offs
    JEL: C92 L50 D80
    Date: 2015–09–25
  12. By: SELLAMI, Sana; VERHAEST, Dieter; NONNEMAN, Walter; VAN TRIER, Walter
    Abstract: We investigate the role of four motives to participate in higher education – investment, educational consumption, student life consumption and social pressure – on field of study choices and academic performance and on three labour market outcomes – over-education, wages and job satisfaction. We use data on three cohorts of about 3000 Flemish individuals documenting the transition from education to work. Principal components are used to identify the four study motives. Effects of study motives on field of study choices and academic performance are estimated using logit respectively Poisson regression. Effects on over-education are measured by two-bit regression and on wages and job satisfaction using standard and IV panel estimates. Key findings are that individuals motivated by education consumption are less likely to be overeducated but face a stronger job satisfaction penalty to over-education than other workers. Our results also suggest that individuals who continue in education because of student life consumption have a higher likelihood of over-education.
    Keywords: Educational motives, Higher education, Graduates, Wages, Job satisfaction, Underemployment, Over-qualification
    Date: 2015–05
  13. By: Sebastian Barfort (Department of Economics, University of Copenhagen); Nikolaj Harmon (Department of Economics, University of Copenhagen); Frederik Hjorth (Department of Political Science, University of Copenhagen); Asmus Leth Olsen (Department of Political Science,, University of Copenhagen)
    Abstract: Are country-level differences in corruption related to the dishonesty level of individuals entering public service? Recent studies have found that dishonest individuals self-select into public service in high-corruption settings. Little is known, however, about what is driving this pattern and whether a similar pattern exists in low-corruption settings. This paper examines selection into public service in the world’s least corrupt country, Denmark. We subject a relevant student population to a standard experimental dishonesty task and develop a novel method to estimate individual-level dishonesty from the experimental data. We then relate estimates of dishonesty to subjects’ job preferences and characteristics. In contrast to previous findings, dishonest individuals in low-corruption Denmark are less likely to want to enter public service. This self-selection is not related to risk-aversion or ability. Instead, we find that dishonest individuals who self-select into higher paid private sector careers such as finance are less altruistic and place a higher weight on their own earning opportunities. Accordingly, counterfactual wage questions suggest that higher public sector wages would attract more dishonest candidates to the public sector in Denmark.
    Keywords: occupational choice, sector choice, coin tossing, dice under cup
    JEL: D73 C91 H83
    Date: 2015–09–04
  14. By: Esteban, Joan Maria; Levy, Gilat; Mayoral, Laura
    Abstract: In this paper we study the role of religiosity and individual liberties in influencing the choice of labor effort. To a standard model with consumption and effort, we add a third (public) good: civil liberties with a cap established by law. We assume that the higher the degree of religiosity of an individual the less he likes liberties, such as divorce, abortion, gender parity, or gay marriage. With standard assumptions on individual preferences, our model implies that individual labor supply is decreasing in the level of personal religiosity and that this negative relationship is enhanced by the width of liberties. We show empirically that this holds and that the size of the effect is large. Specifically, we construct an index of civil liberties and find solid evidence in support of the joint effect of religiosity and liberties on labor effort.
    Keywords: civil liberties; Labour supply; Religiosity
    JEL: J22 Z12
    Date: 2015–09
  15. By: Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos
    Abstract: Discrimination in access to public services can act as a major obstacle towards addressing racial inequality. We examine whether racial discrimination exists in access to a wide spectrum of public services in the US. We carry out an email correspondence study in which we pose simple queries to more than 19,000 local public service providers. We find that emails are less likely to receive a response if signed by a black-sounding name compared to a white-sounding name. Given a response rate of 72% for white senders, emails from putatively black senders are almost 4 percentage points less likely to receive an answer. We also find that responses to queries coming from black names are less likely to have a cordial tone. Further tests suggest that the differential in the likelihood of answering is due to animus towards blacks rather than inferring socioeconomic status from race.
    Keywords: discrimination, public services provision, school districts, libraries, sheriffs, field experiment, correspondence study
    Date: 2015–09

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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