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on Social Norms and Social Capital |
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Issue of 2015‒11‒01
nineteen papers chosen by Fabio Sabatini Università degli Studi di Roma “La Sapienza” |
| By: | Heimer, Rawley (Federal Reserve Bank of Cleveland); Simon, David (Federal Reserve Bank of Cleveland) |
| Abstract: | This paper shows how active investing strategies propagate through social connections in a network of retail traders, using a new database of social activity linked to individual-level trading records. A trader’s good short-term performance causes them to contact others. A trader’s activity increases when peers perform well and increase communication. We use the staggered entry of brokerages into partnerships with the social networking platform, which is a necessary precursor for traders to access the network, to argue these effects are causal. This pattern of communication supports active trading, even though the network reveals the low success rate of retail traders. |
| Date: | 2015–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1522&r=soc |
| By: | Ece Yagman (SALDRU, the School of Economics, University of Cape Town); Malcolm Keswell (SALDRU, School of Economics, University of Cape Town) |
| Abstract: | We investigate discrimination according to accent and race on trust behaviour. Proposers were randomly paired with responders of the same/different race, and asked to play the trust game after looking at a photograph and hearing a 10 second audio clip of the responders reading a standardised script in English. This allows us to check for within and across-group favouritism in both race and accentedness. We find that accentedness is a statistically significant predictor of trust and is strongly non-linear in the race of the paired subjects for males but not for females. In the case of males, offers decrease by 11.3% if the responder has a mother-tongue English accent and does not share the same race as the proposer, but increases by about 6.6% if there is racial similarity. This effect is especially pronounced for Black males who are paired with other Black males: offers are 19.5% higher if responders have a mother-tongue English accent. By contrast, females in general seem less sensitive to the signal package. These large gender differences are not because men behave any more strategically than women. |
| Keywords: | Experiments, Trust, Accents, Discrimination, Race |
| JEL: | C91 D03 J15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:158&r=soc |
| By: | Francesco Drago (Università di Napoli Federico II and CSEF); Friederike Mengel (University of Essex and Maastricht University); Christian Traxler (Hertie School of Governance, Berlin, Max Planck Institute for Research on Collective Goods and CESifo) |
| Abstract: | This paper studies the spread of compliance behavior in neighborhood networks involving over 500,000 households in Austria. We exploit random variation from a field experiment which varied the content of mailings sent to potential evaders of TV license fees. Our data reveal a strong treatment spillover: ‘untreated’ households, who were not part of the experimental sample, are more likely to switch from evasion to compliance in response to the mailings received by their network neighbors. We analyze the spillover within a model of communication in networks based on DeGroot (1974). Consistent with the model, we find that (i) the spillover increases with the treated households’ eigenvector centrality and that (ii) local concentration of equally treated households produces a lower spillover. These findings carry important implications for enforcement policies. |
| Keywords: | neighborhood networks; social learning; spillover; evasion; field experiment. |
| JEL: | D8 H26 Z13 |
| Date: | 2015–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:419&r=soc |
| By: | Pierre Picard; Yves Zenou |
| Abstract: | We develop a model where workers both choose their residential location (geographical space) and social interactions (social space). In equilibrium, we show under which condition the majority group resides close to the job center while the minority group lives far away from it. Even though the two populations are ex ante totally identical, we find that the majority group experiences a lower unemployment rate than the minority group and tends to socially interact more with other workers of its own group. Within each group, we demonstrate that workers residing farther away from the job center tend to search less for a job and are less likely to be employed. This model is thus able to explain why ethnic minorities are segregated in the urban and social space and why this leads to adverse labor-market outcomes in the absence of any discrimination against the minority group. |
| Keywords: | Social interactions; segregation; labor market;spatial mismatch. |
| JEL: | A14 J15 R14 Z13 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1493&r=soc |
| By: | Arun Advani (Institute for Fiscal Studies); Bryony Reich (Institute for Fiscal Studies and University College London) |
| Abstract: | Relatively little is known about what determines whether a heterogenous population ends up in a cooperative or divisive situation. This paper proposes a theoretical model to understand what social structures arise in heterogeneous populations. Individuals face a trade-off between cultural and economic incentives: an individual prefers to maintain his cultural practices, but doing so can inhibit interaction and economic exchange with those who adopt different practices. We find that a small minority group will adopt majority cultural practices and integrate. In contrast, minority groups above a certain critical mass, may retain diverse practices and may also segregate from the majority. The size of this critical mass depends on the cultural distance between groups, the importance of culture in day to day life, and the costs of forming a social tie. We test these predictions using data on migrants to the United States in the era of mass migration, and find support for the existence of a critical mass of migrants above which social structure in heterogeneous populations changes discretely towards cultural distinction and segregation. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:15/30&r=soc |
| By: | Todd Stinebrickner (University of Western Ontario and NBER); Ralph Stinebrickner; Nirav Mehta (University of Western Ontario); Timothy Conley (Western Ontario) |
| Abstract: | Due to data limitations, few papers documenting the existence of peer effects explore the mechanisms through which they operate. This paper develops and estimates an equilibrium model of study time choices made by students, given a social network. The model is designed to exploit unique data collected in the Berea Panel Study (BPS). The study time data allow us to quantify an intuitive mechanism for social interactions: one's own study time may depend on friends' study time. The detailed social network data allow us to embed these individual study time choices in an equilibrium framework, allowing for feedback effects. We find evidence of both the direct and indirect effects of friend study time. Not taking into account equilibrium behavior would understate the effect of peers on achievement by 20-30% of a standard deviation. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1175&r=soc |
| By: | Amini, Makan (Advent International); Ekström, Mathias (NHH Norwegian School of Economics); Ellingsen, Tore (Stockholm School of Economics); Johannesson, Magnus (Stockholm School of Economics); Strömsten, Fredrik (McKinsey & Company) |
| Abstract: | Failure to express minority views may distort the behavior of company boards, committees, juries, and other decision-making bodies. Devising a new experimental procedure to measure such conformity in a judgment task, we compare the degree of conformity in groups with varying gender composition. Overall, our experiments offer little evidence that gender composition affects expression of minority views. A robust finding is that a subject’s lack of ability predicts both a true propensity to accept others judgment (informational social influence) and a propensity to agree despite private doubt (normative social influence). Thus, as an antidote to conformity in our experiments, high individual ability seems more effective than group diversity. |
| Keywords: | Conformity; Gender Differences; Group Composition; Skill |
| JEL: | C90 D02 D71 D83 J16 |
| Date: | 2015–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1091&r=soc |
| By: | Fernando Bruna; Isabel Neira; Marta Portela; Adela García-Aracil |
| Abstract: | During the last years, happiness has received an increasing attention in the empirical literatures of Psychology, Sociology and Economics. In addition, a growing number of studies have focused on social capital. Most of this research analyzes survey data on life satisfaction and/or happiness at the individual level, some of them study the regional and national happiness, alternatively, both micro and macro determinants of individual happiness can be jointly studied through multilevel (or hierarchical) modelling. The lack of geographically referenced data hampers the use of methodologies, which control space effects, without highlighting elements related to the territory. Few previous works have estimated spatial econometric models of happiness at the macro level, by aggregation for regions. This paper provides theoretical arguments to consider regional heterogeneity and interdependence when modelling the effects of social capital on life satisfaction and happiness. The novel hypothesis in this paper is that the impact of the individual endowments of social capital on individual happiness can be different depending on latent variables, such as a social and cultural environment, which are spatially defined. The goal of this paper is to analyse the hierarchical modelling of spatial and social factors conditioning the individual happiness of Europeans. The paper compares alternative multilevel specifications for personal wellbeing, including different effects and measures for the dependent and independent variables. Using individual European data from the ESS 2012, and following a multilevel approach, the paper focuses on studying whether models of happiness with random slopes are able to capture the regional spatial dependence that appears when the individual data is aggregated. The results of random slopes models are compared to those of alternative specifications previously proposed in the literature, such as the use of regional means. Moreover, the paper also analyses whether these models are able to capture the residual spatial dependence appearing when the individual data is aggregated at the regional level. In case of existing possible remaining residual spatial autocorrelation, spatial hierarchical models with interregional effects allow capturing it. Our preliminary results show that individual well-being is affected by regional averages of social capital. Additionally, the random slope specification confirms the hypothesis of a different regional impact of the individual social capital depending on location. This evidence might indicate that the social and cultural environment where people lives make individuals to attach different relevance to the role of social and institutional trust, social norms and networks as determinants of individual wellbeing. |
| Keywords: | Life satisfaction; social capital; multilevel models; random slopes |
| JEL: | C50 I31 Z13 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1215&r=soc |
| By: | Tamas Dusek; Eva Palmai |
| Abstract: | This study examines the association between urban/rural residence and various forms of trust in Hungary, including control variables such as age, gender, income, marriage, qualification into the analysis. Trust is a basic dimension of human capital and a very often used concept in everyday situations too. Trust research became increasingly popular in recent years. However, urban-rural and spatial differences of specific forms of trust remains a rarely investigated question. Trust can be measured with one question (global or general trust) or with many questions. Global measures of trust have serious methodological and interpretative problems. Therefore a research was conducted with 19 questions concerning the various personal or impersonal subjects of trust. Respondents (n=2031) of a countrywide representative survey in Hungary rated their trust in various groups or institutions on a 10-point Likert scale. The results were analysed along the settlement hierarchy at four different levels: Budapest, the country capital; cities with county rights (namely the biggest Hungarian cities, apart from Budapest); smaller and medium sized cities; villages. Various sociodemographic factors were included into the analysis. In some cases age and gender is a more significant factor in differentiating the results as the settlement type, but age and gender can have a different effect on results for different settlement types. The results have a great variability according to the subject of trust. General differences between settlement types show a higher trust level in cities with county rights, then towns, villages and at last Budapest. Exceptions from this general picture are highly interesting: trust in personal contacts is much lower in Budapest, trust in institutions or abstract institutions (law and legal system, market system, political system, banks) is higher than in villages, institutions with more concrete personal contacts is higher in villages than in Budapest. The difference is bigger in the case of church. In Budapest, compared to other settlements, trust is lower in personal contacts, but the differences between settlement categories are lower than the differences of trust between the personal and impersonal contacts. Gender differences according to the settlement categories are also interesting. The highest trust level can be seen in elder age. However, trust of younger adults is higher in Budapest, mainly thanks to the much higher trust level in abstract institutions. Trust of younger adults in personal contacts and health institutions is not higher in Budapest. These are just some of the main finding of our complex results. |
| Keywords: | urban-rural differences; trust; territorial capital |
| JEL: | R5 R20 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p405&r=soc |
| By: | Wenjie Wu; Jianghao Wang |
| Abstract: | Location-based social media data is, increasingly, an important facilitator of exploring the movement of goods and people in and between countries across the globe. Typical examples include Twitter, Facebook, Foursquare. As with all social media data outputs, the fundamental value of location-based social media data is for sensing users? space?time trajectories, and thus, makes social media data a new platform for understanding business and social interactions in the spatial context. In large developing and emerging economies with massive social media users via computers and mobile phones, real-time ?geo-tagged? human mobility information from social media data sources are clearly potentially large. In these settings, cyberspaces are often built and expanded with the explicit aim of stimulating digital socioeconomic activities and balancing regional disparities. However, despite intense policy and public enthusiasms, there is virtually no direct evidence on exploring the configuration of urban network patterns by using social media users? mobility flows within a large developing country context. The scarcity of empirical evidence is not surprising, given that mining location-based social media data faces serious identification challenges. First, location-based social media data, as a type of big data resource, are often featured by the dynamic, massive information generated by billions of users across space. In truth, despite of the recent development of intensive-computational geographic information system (GIS) modeling programs, social media data with precise individual-level location information is still extremely large to proceed by using the GIS techniques at multiple geographical scales. Furthermore, conventional GIS-based computational methods cannot directly read the unstructured social media datasets (e.g. words, pictures, videos). Additional big data mining methods are often needed to transform social media data information from unstructured data formats to structured, and ready-to-use spatial datasets. In this paper, we tackle these problems by analysing the configuration of intercity connection patterns in China to provide new evidence to the applications of location-based social media data in urban and regional studies. Our examination of changes in human mobility patterns by months by city-pairs throughout China by months involves many potential stages of big data mining analysis. We stratify cities by core-periphery urban systems, by regions and by calendar months, finding that human mobility flows are not distributed evenly over time and across space. We find larger human mobility flows around the Chinese New Year month and the summer months. Our evidence suggests the significantly heterogeneity patterns of core-periphery urban systems as reflected from real-time human mobility flows. As a baseline, this paper is?for the first time in the literature?to comprehensively measure urban network patterns at a detailed spatial degree (the city-pair level) based on location-based social media data from a large developing country context. |
| Keywords: | Big data; Social media; Urban network; China |
| JEL: | P25 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p798&r=soc |
| By: | Astrid, Gamba; Tobias, Regner |
| Abstract: | We study experimentally whether heterogeneity of behavior in the Centipede game can be interpreted as the result of a learning process of individuals with different preference types (more and less pro-social) and coarse information regarding the opponent's past behavior. We manipulate the quality of information feedbacks provided after each play. If subjects rely only on their personal database, long run behavior resembles a Self-confirming equilibrium whereby less pro-social types take at earlier nodes due to prediction errors. Aggregate information release decreases heterogeneity of behavior by increasing the passing rates of pro-selfs and play moves towards Bayesian Nash equilibrium. |
| Keywords: | Social preferences, Learning, Self-confirming equilibrium, Experiment |
| JEL: | C71 C73 C91 D83 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:311&r=soc |
| By: | Tiiu Paas; Veronika Kuranova |
| Abstract: | Economic growth and improvement of citizens? wellbeing are obligate targets of economic, social and institutional development of all countries and their governments. At the same time empirical evidence often shows that economic growth and increase of people?s income do not always have outcomes indicating that individual?s wellbeing has been improved. There are several non-economic and economic determinants of subjective well-being and knowing them is unavoidable in order to formulate and achieve targets for improvement of people?s wellbeing. |
| Keywords: | subjective wellbeing; economic development; trust; institutions |
| JEL: | I30 D31 O52 O12 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p963&r=soc |
| By: | Dang, Duc Anh |
| Abstract: | This paper considers the effects of social network on income and employment dynamics of rural-urban migrants in Vietnam. Estimation of a causal effect is challenging because unobserved factors affects both employment performances and social networks. I address this endogeneity problem by using instrumental variable method. The results suggest that social networks improve migrant’s earnings and make wage earners willing to change their jobs. |
| Keywords: | migration, social network, employment |
| JEL: | D02 J61 |
| Date: | 2015–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67479&r=soc |
| By: | Julia Korosteleva; Tomasz Mickiewicz; Paulina Stepien |
| Abstract: | In this study we investigate how both local environment and individual characteristics explain incidence of corruption. More specifically, we explore how city size, and residing in a capital city influence the two aspects of corruption, notably in individuals? contact with officials, and in the use of courts. Building upon Storper?s argument (2013) we further analyse the effects of local institutional trust (bridging), and community embedded trust (bonding), on incidence of corruption. Finally, we also investigate how access to elements of information and communication technology, individually and spatially defined (within the local social neighbourhood), affect corruption. To test our hypotheses, we apply a multilevel Heckman selection probit model to European Bank for Reconstruction and Development survey data. The sample covers over 26,000 of individuals in 35 countries in 2010. While our results suggest that categories of some individuals, business owners in particular, are more likely to face corruption, and therefore need more policy attention, we also find that the differences in environment play a critical role. More specifically our results suggest that larger cities are more prone to officials? corruption than medium and small ones. However, we also show that capital cities are different from larger cities in that they seem to exhibit lower corruption levels for both, courts and officials. We interpret the latter association as related to the structure of social and political connections. Larger cities are often more fragmented than capital cities in terms of power. Larger cities with many small jurisdictions imply localities where consistent expectations are easier to achieve, so individuals more likely to adopt patterns that other individuals practice, including corruptive behaviour, being trapped in a circle of corruption, where corruption becomes a (local) social norm. At the same time, capital cities are typically less fragmented and more centralised in terms of power, having metropolitan governance structures; they have bigger, more internally heterogenous jurisdictions. Importantly, there is less scope for local social process of learning from other individuals to establish corruption as a local norm. We further show that the effect of the size of the city on corruption is mitigated by higher level of local institutional trust (bridging), and inbound trust proxied by trust in friends and acquaintances (bonding). The effect of the former is weaker compared to the effect of the latter. Where bonding and bridging are both present, this reinforces their moderating effect on the impact of city size on corruption. Finally, our results also suggest that in the neighbourhoods where on average individuals have higher access to elements of information and communication technology, corruption of both officials and courts is significantly lower. |
| Keywords: | Corruption; Neighbourhood; City size; Capital city; Institutions; ICT |
| JEL: | R10 R23 R28 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1055&r=soc |
| By: | Mihaela van der Schaar; Simpson Zhang |
| Abstract: | This paper considers the evolution of a network in a discrete time, stochastic setting in which agents learn about each other through repeated interactions and maintain/break links on the basis of what they learn from these interactions. Agents have homophilous preferences and limited capacity, so they maintain links with others who are learned to be similar to themselves and cut links to others who are learned to be dissimilar to themselves. Thus learning influences the evolution of the network, but learning is imperfect so the evolution is stochastic. Homophily matters. Higher levels of homophily decrease the (average) number of links that agents form. However, the effect of homophily is anomalous: mutually beneficial links may be dropped before learning is completed, thereby resulting in sparser networks and less clustering than under complete information. There may be big differences between the networks that emerge under complete and incomplete information. Homophily matters here as well: initially, greater levels of homophily increase the difference between the complete and incomplete information networks, but sufficiently high levels of homophily eventually decrease the difference. Complete and incomplete information networks differ the most when the degree of homophily is intermediate. With multiple stages of life, the effects of incomplete information are large initially but fade somewhat over time. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1510.08103&r=soc |
| By: | Dafeng Xu |
| Abstract: | This paper examines acculturational homophily in friendships of international students. Acculturation (also known as cultural assimilation) is measured by English-name usage. I use data from Renren.com, a Facebook-type social networking site based in China. The sample consists of students who have bachelor's degrees in China and have or will have graduate degrees in the U.S. On Renren, students have the option to add English names after their Chinese names, which quantifies acculturational characteristics. The difficulty of pronouncing the original Chinese name by native speakers of English creates a natural experiment on English-name usage. Using OLS and IV models, I find that a student who shows the English name online has more close friends who also show English names online. This provides empirical evidence that individual immigrants tend to have friends with similar acculturational characteristics. |
| Keywords: | acculturation; homophily; English name; friendship; immigration |
| JEL: | J1 R2 Z1 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p899&r=soc |
| By: | Paula Regina de Jesus Pinsetta Pavarina; Daltro Cella |
| Abstract: | This paper aims to collaborate with the discussion about the factors that try to explain the economic behavior in Latin America countries, considering the importance of some attributes related to social capital (ie interpersonal trust, which leads to association and civic commitment, performing what Putnam (1993) considers a 'civic community') pari passu the institutional behavior, ie the ?rules of the game in a society? (North 1990). These two dimensions attempt to explain the behavior of agents facing the rational economic decision of cooperate or not. It can be stated that this decision depends on two factors: (1) the expected behavior of other agents ('I cooperate if the other will also cooperate') and (2) the existence of standards, patterns or rules that hinder or prevent opportunism (in order to avoid that cooperation seems a 'fool?s choice'). The more generalized trust is, it is expected that there will be more cooperation. Furthermore strong institutions that can enforce pre-established rules reduce the uncertainty and insecurity of the decision-making process. The key question when these two dimensions are considered at the same time is if they are complementary or substitute to each other in Latin America context. In other words, it tries to understanding the relationship between formal and informal 'rules of the game' as well as high levels of social capital to the economic behavior and economic actions. Then this study assesses the contribution of these two elements to the economic performance of Latin America, considering data provided by large international databases such as Latinobarometro, World Values Survey, Index of Economic Freedom, Worldwide Governance Indicators, International Country Risk Guide, and Polity IV. Theoretically, it is easy to display the relationships that can be established between these concepts but in practice, there is great methodological difficulty to quantify them. Thus, several indicators or proxies are selected among all the possible variables that exist in these databases. Social capital can be represented by very subjective elements such as trust, values and assimilation of social norms. The same difficulty occurs when it is considered the role of institutions; since it is difficult to evaluate the effective contribution of formal institutions to economic performance. The simple existence of institutions, understood as formal 'rules of the game', does not guarantee that they are fulfilling their intended functions. |
| Keywords: | institutions; economic development; latin america |
| JEL: | A13 O17 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p209&r=soc |
| By: | Stephan Schosser (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | When talking about possible bargaining results participants in the Nash bargaining game mainly use fairness norms to support their favored outcome. According to theory a variety of different, fair solutions exists from which the participants can choose. In this paper, we experimentally investigate Nash bargaining with a previous opportunity to chat about the bargaining outcome. We find that playing a dictator game prior to the Nash bargaining game establishes – without any additional communication – a fairness norm, the participants resort to. However, if nothing is played prior to the Nash bargaining game, participants discuss longer about what to play. In addition, we find that deviations in favor of one participant occur the longer preplay communication lasts. |
| Keywords: | bargaining game, dictator game, norms, experimental economics |
| JEL: | C7 C9 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:150013&r=soc |
| By: | Sheremeta, Roman |
| Abstract: | Group contests are ubiquitous. Some examples include warfare between countries, competition between political parties, team-incentives within firms, group sports, and rent-seeking. In order to succeed, members of the same group have incentives to cooperate with each other by expending individual efforts. However, since effort is costly, each member also has an incentive to abstain from expending any effort and instead free-ride on the efforts of other members. Contest theory shows that the intensity of competition between groups and the amount of free-riding within groups depend on the group size, sharing rule, group impact function, contest success function, and heterogeneity of players. We review experimental studies testing these theoretical predictions. Almost all studies of behavior in group contests find significant over-expenditure of effort relative to the theory. We discuss potential explanations for such over-expenditure, including the utility of winning, bounded rationality, relative payoff maximization, parochial altruism, and social identity. Despite over-expenditure, most studies find support for the comparative statics predictions of the theory (with the exception of the “group size paradox”). Finally, studies show that there are effective mechanisms that can promote within-group cooperation and conflict resolution mechanisms that can de-escalate and potentially eliminate between-group conflict. |
| Keywords: | groups, contests, experiments |
| JEL: | C7 C9 D7 H4 J4 K4 L2 M5 |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67515&r=soc |