nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2015‒11‒07
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Voting and contributing when the group is watching By Henry, Emeric; Louis-Sidois, Charles
  2. Compliance Behavior in Networks: Evidence from a Field Experiment By Drago, Francesco; Mengel, Friederike; Traxler, Christian
  3. Social Networks and Factor Markets: Panel Data Evidence from Ethiopia By Abay, Kibrom; Kahsay, Goytom; Berhane, Guush
  4. Friends or traders? Do social networks explain the use of market mechanisms by farmers in India By Songsermsawas, Tisorn; Baylis, Kathy; Chhatre, Ashwini; Michelson, Hope; Prasanna, Satya
  5. Spatial vs. Social Network Effects in Risk Sharing By Aida, Takeshi
  6. On the Puzzle of Diversification in Social Networks with Occupational Mismatch By Zaharieva, Anna
  7. Understanding Peer Effects: On the Nature, Estimation and Channels of Peer Effects By Feld, Jan; Zölitz, Ulf
  8. Asymmetry of Information within Family Networks By Joachim De Weerdt; Garance Genicot; Alice Mesnard
  9. Gender priming and altruism in a random sample By Boschini, Anne; Dreber, Anna; von Essen, Emma; Muren, Astri; Ranehill, Eva
  10. Incentives and Social Preferences: Experimental Evidence from a Seemingly Inefficienct Traditional Labor Contract By Goto, Jun; Sawada, Yasuyuki; Aida, Takeshi; Aoyagi, Keitaro
  11. Social cooperatives, social welfare associations and social networks By Degli Antoni, Giacomo; Sabatini, Fabio
  12. Gender and Corruption: A Reassessment By Debski, Julia; Jetter, Michael

  1. By: Henry, Emeric; Louis-Sidois, Charles
    Abstract: Members of groups and organizations often have to decide on rules that regulate their contributions to common tasks. They typically differ in their propensity to contribute and often care about the image they project, in particular want to be perceived by other group members as being high contributors. In such environments we study the interaction between the way members vote on rules and their subsequent contribution decisions. We show that multiple norms can emerge. We draw surprising policy implications, on the effect of group size, of supermajority rules and of the observability of actions.
    Keywords: image concern; information aggregation; public good; voting
    JEL: D71 D72 H41
    Date: 2015–11
  2. By: Drago, Francesco (University of Naples Federico II); Mengel, Friederike (University of Essex); Traxler, Christian (Hertie School of Governance)
    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
  3. By: Abay, Kibrom; Kahsay, Goytom; Berhane, Guush
    Abstract: In the absence of well-established factor markets, the role of indigenous institutions and social networks can be substantial for mobilizing factors for agricultural production. We investigate the role of an indigenous social network in Ethiopia, the iddir, in facilitating factor market transactions among smallholder farmers. Using detailed longitudinal household survey data and employing a difference-in-differences approach, we find that iddir membership improves households’ access to factor markets. Specifically, we find that joining an iddir network improves households’ access to land, labor and credit transactions between 7 and 11 percentage points. Furthermore, our findings also indicate that iddir networks crowd-out borrowing from local moneylenders (locally referred as Arata Abedari), a relatively expensive credit source, virtually without affecting borrowing from formal credit sources. These results point out the roles non-market arrangements, such as social networks, can play in mitigating market inefficiencies in poor rural markets.
    Keywords: Social networks, iddir networks, factor market imperfections, factor market transactions, crowding-out, Marketing, Public Economics,
    Date: 2015
  4. By: Songsermsawas, Tisorn; Baylis, Kathy; Chhatre, Ashwini; Michelson, Hope; Prasanna, Satya
    Abstract: A farmer's long-term relationship with a trader can improve access to market information, but removes the farmers' option to sell to other traders in a specific year. Social networks could act either as substitutes to traders, helping disseminate market information and fostering economies of scale, or as complements, where farmers help build relationships between their trader and their peers. Using a household survey from India, we investigate whether and how social networks are associated with a farmer's choice to enter into a long-term relationship with a trader. We find that peers directly affect such choice. Further, we find that network characteristics and the household's position within that network influence the decision to have a long-term relationship. Specifically, the more central position of the household and the smaller number of connections with other households, the higher the likelihood a household has a long-term relationship with at least one trader. We rule out that these effects are driven by proximity.
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance,
    Date: 2015
  5. By: Aida, Takeshi
    Abstract: Although substantial research has been conducted on informal consumption smoothing mechanisms within villages, or within social clusters such as family and friends, few studies have compared the effects of these spatial and social networks. Employing spatial panel econometric models, this study extends the conventional empirical test of the full risk-sharing hypothesis to incorporate spatial and social network effects, and quantifies the diffusion of income shocks in each network. Estimation results based on household survey data in Southern Sri Lanka show that consumption smoothing performs better in spatial networks than in social ones, because income shocks defuse more effectively among neighboring households. This study also shows the limitations of the conventional test when it is considered a special case of a spatial econometric model.
    Keywords: Agribusiness,
    Date: 2015
  6. By: Zaharieva, Anna (Center for Mathematical Economics, Bielefeld University)
    Abstract: This paper incorporates social networks into a frictional labour market framework. There are two worker types and two occupations. Both occupations are subject to correlated business cycle fluctuations in labour demand. The equilibrium in this model is characterized by occupational mismatch which is associated with a wage penalty. This paper shows that there exists a unique value of network homophily maximizing the present value of income. Therefore, there is a gain for risk-neutral workers if their network is diversified between the two occupations. The reason for diversification is that the present value of income is a non-linear function of the network composition. Thus, it is not the desire to reduce the volatility of income as in standard portfolio theory which is driving the decision of workers. Nevertheless, the optimal diversification level is higher with stronger negative correlation in labour demand between the two occupations, with a lower unemployment benefit and with a higher probability of recession in the primary occupation. On the other hand, the optimal diversification level is reduced if there is on-the-job search in the state of mismatch.
    Keywords: diversification, homophily, Occupational mismatch, social networks
    Date: 2015–10–27
  7. By: Feld, Jan; Zölitz, Ulf
    Abstract: This paper estimates peer effects in a university context where students are randomly assigned to sections. While students benefit from better peers on average, low-achieving students are harmed by high-achieving peers. Analyzing students’ course evaluations suggests that peer effects are driven by improved group interaction rather than adjustments in teachers’ behavior or students’effort. We further show, building on Angrist (2014), that classical measurement error in a setting where group assignment is systematic can lead to substantial overestimation of peer effects. With random assignment, as is the case in our setting, estimates are only attenuated.
    Keywords: Peer effects, Higher education, Measurement error, Estimation bias,
    Date: 2015
  8. By: Joachim De Weerdt; Garance Genicot; Alice Mesnard
    Abstract: This paper studies asymmetry of information and transfers within a unique data set of 712 extended family networks from Tanzania. Using cross-reports on asset holdings, we construct measures of misperception of income among all pairs of households belonging to the same network. We show that there is significant asymmetry of information and no evidence of major systematic over-evaluation or under-evaluation of income in our data, although there is a slight over-evaluation on the part of migrants regarding non-migrants. We develop a static model of asymmetric information that contrasts altruism, pressure and exchange as motives to transfer. The model makes predictions about the correlations between misperceptions and transfers under these competing explanations. Testing these predictions in the data uncovers the active role played by the recipient. Our findings suggest that the recipient sets the terms of the transfers, either by exerting pressure to give on the donor or by holding the bargaining power during the exchange of services with the donor.
    JEL: D12 O12 O15
    Date: 2015–10
  9. By: Boschini, Anne (SOFI); Dreber, Anna (Stockholm School of Economics); von Essen, Emma (Aarhus University); Muren, Astri (Dept. of Economics, Stockholm University); Ranehill, Eva (University of Zurich)
    Abstract: We study gender differences in altruism in a large random sample of the Swedish population using a standard dictator game. In our data, a gender gap in altruism emerges when we increase the salience of gender by priming participants with their gender and placing them in a gender-mixed context. In this case women give more than in the baseline, and men give less, thereby creating a significant gender difference in altruism. Our findings provide insight into the conditions under which individuals’ gender identity is made salient.
    Keywords: Gender differences; Random sample; Dictator games; Gender context; Priming; Experiment
    JEL: C91 C93 J16
    Date: 2015–10–23
  10. By: Goto, Jun; Sawada, Yasuyuki; Aida, Takeshi; Aoyagi, Keitaro
    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 non-monetary 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.
    Keywords: Randomized controlled trials, incentives, social preferences, peer effect, labor contract, field experiments, Labor and Human Capital, D03, C93, D22, C91,
    Date: 2015
  11. By: Degli Antoni, Giacomo; Sabatini, Fabio
    Abstract: We use an original dataset to study how participation in two types of nonprofit organizations, i.e. social welfare associations and social cooperatives, affects individual social capital, intended as networks of cooperative relationships. Participation in both the types of organization allows members to start new social relations. However, social welfare associations seem to play a significantly greater role in the development of volunteers’ social capital, favouring the creation of weak ties that are used to exchange information and advice, and offering the opportunity to establish stronger ties entailing concrete mutual support. Within social cooperatives, workers appear to develop their individual social capital to a greater extent than volunteers. Our results suggest that the composition of the workforce, the depth of members’ involvement in the organization’s activities and human resources strategies adopted by the management influence the creation of cooperative relations through on-the-job interactions.
    Keywords: social capital, nonprofit organizations, social cooperatives, social networks, volunteering
    JEL: L31 L33 P13 Z1 Z13
    Date: 2015–11–03
  12. By: Debski, Julia (University of Bayreuth); Jetter, Michael (University of Western Australia)
    Abstract: This paper analyzes the relationship between gender and corruption, controlling for country-specific heterogeneity in a panel framework. Using annual observations in a pooled setting (no country-fixed effects) confirms the positive link between the involvement of women in society and the absence of corruption. However, once country-fixed effects are acknowledged, only the share of female employers remains a positive and statistically meaningful correlate. Nevertheless, the derived magnitude is negligible in a global sample. Analyzing potential nonlinearities reveals that this effect is driven by African nations, where a one standard deviation increase in the share of female employers is related to a substantial decrease of corruption by 2.5 index points (scale from zero to ten). Surprisingly, the link between the share of women in the labor force and the absence of corruption becomes negative once country unobservables are accounted for. Taken together, these findings cast doubt on a general, global relationship between gender and corruption.
    Keywords: corruption, gender, panel data
    JEL: C23 D73 J16
    Date: 2015–10

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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