nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2016‒04‒23
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Social Mobility and Stability of Democracy: Re-evaluating De Tocqueville By Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
  2. Sustainability of common pool resources: A field-experimental approach By Raja Timilsina; Koji Kotani; Yoshio Kamijo
  3. Corporate Resilience to Banking Crises: The Roles of Trust and Trade Credit By Ross Levine; Chen Lin; Wensi Xie
  4. The New Economics of Religion By Sriya Iyer; ; ;
  5. Social Capital and the Repayment of Microfinance Group Lending By Luminita Postelnicu
  6. A Glimpse into the World of High Capacity Givers: Experimental Evidence from a University Capital Campaign By Tova Levin; Steven D. Levitt; John A. List
  7. Culture, Diffusion, and Economic Development By Harutyunyan, Ani; Özak, Ömer
  8. Facebook-to-Facebook: Online Communication and Economic Cooperation By Anna Lou Abatayo; John Lynham; Katerina Sherstyuk
  9. Networks of Enterprises and Innovations: Evidence from SMEs in Vietnam By Doan, Quang Hung; Vu, Hoang Nam
  10. Can there be a market for cheap-talk information? Some experimental evidence By Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; Meléndez-Jiménez, Miguel A.

  1. By: Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
    Abstract: An influential thesis often associated with De Tocqueville views social mobility as a bulwark of democracy: when members of a social group expect to join the ranks of other social groups in the near future, they should have less reason to exclude these other groups from the political process. In this paper, we investigate this hypothesis using a dynamic model of political economy. As well as formalizing this argument, our model demonstrates its limits, elucidating a robust theoretical force making democracy less stable in societies with high social mobility: when the median voter expects to move up (respectively down), she would prefer to give less voice to poorer (respectively richer) social groups. Our theoretical analysis shows that in the presence of social mobility, the political preferences of an individual depend on the potentially conflicting preferences of her "future selves", and that the evolution of institutions is determined through the implicit interaction between occupants of the same social niche at different points in time. When social mobility is endogenized, our model identifies new political economic forces limiting the amount of mobility in society - because the middle class will lose out from mobility at the bottom and because a peripheral coalition between the rich and the poor may oppose mobility at the top.
    Keywords: De Tocqueville; democracy; dynamics.; institutions; Social mobility; stability
    JEL: D71 D74
    Date: 2016–04
  2. By: Raja Timilsina (Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Yoshio Kamijo (School of Economics and Management, Kochi University of Technology)
    Abstract: Sustainability has become a key issue in managing natural resources together with growing concerns for capitalism, environmental and resource problems. We hypothesize that ongoing modernization of competitive societies, which we call "capitalism," affects human nature and preference in utilizing common pool resources, further endangering the sustainability. To test the hypothesis, this paper designs and implements a dynamic common pool resource game in the two types of Nepalese fields: (i) rural (non capitalistic) and (ii) urban (capitalistic) areas. We find that a proportion of prosocial people in the urban is lower than that in the rural, and urban people deplete resources more quickly than rural people. The composition of proself and prosocial people in a group and the degree of capitalism (rural vs. urban) are crucial in the sense that an increase of prosocial members in a group and the rural dummy positively affect resource sustainability by approximately 65% and by 45%, respectively. Overall, this paper concludes that when societies move toward more capitalistic environments, sustainability of common pool resources tends to be lost through changes in people’s preferences, social norms, customs and assumptions for other people. It implies that people may gradually be losing their coordination abilities for social dilemmas of resource sustainability in capitalistic societies.
    Keywords: sustainability, dynamic common pool resource, capitalism, field experiment
    Date: 2016–04
  3. By: Ross Levine; Chen Lin; Wensi Xie
    Abstract: Are firms more resilient to systemic banking crises in economies with higher levels of social trust? Using firm-level data in 34 countries from 1990 through 2011, we find that liquidity-dependent firms in high-trust countries obtain more trade credit and suffer smaller drops in profits and employment during banking crises than similar firms in low-trust economies. The results are consistent with the view that when banking crises block the normal banking-lending channel, greater social trust facilitates access to informal finance, cushioning the effects of these crises on corporate profits and employment.
    JEL: D22 G01 G21 G32 Z13
    Date: 2016–04
  4. By: Sriya Iyer; ; ;
    Abstract: The economics of religion is a relatively new field of research in economics. This survey serves two purposes – it is backward-looking in that it traces the historical and sociological origins of this field, and it is forward-looking in that it examines the insights and research themes that are offered by economists to investigate religion globally in the modern world. Several factors have influenced the economics of religion: (1) new developments in theoretical models including spatial models of religious markets and evolutionary models of religious traits; (2) empirical work which addresses innovatively econometric identification in examining causal influences on religious behavior; (3) new research in the economic history of religion that considers religion as an independent rather than as a dependent variable; and (4) more studies of religion outside the Western world. Based on these developments, this paper discusses four themes – first, secularization, pluralism, regulation and economic growth; second, religious markets, club goods, differentiated products and networks; third, identification including secular competition and charitable giving; and fourth, conflict and cooperation in developing societies. In reviewing this paradoxically ancient yet burgeoning field, this paper puts forward unanswered questions for scholars of the economics of religion to reflect upon in years to come.
    Date: 2015–01–01
  5. By: Luminita Postelnicu
    Abstract: Microfinance Performance and Social Capital: A Cross-country AnalysisThis paper investigates the relationship between the extent to which social capital formation is facilitated within different societies, and the financial and social performance of MFIs. We carry out a cross-country analysis on a dataset containing 100 countries. We identify different social dimensions that we use as proxies for how easy social capital can be developed in different countries, and we hypothesize that microfinance is more successful, both in terms of their financial and social aims, in societies that are more conducive to the development of social capital. Our empirical results support our hypothesis.
    Abstract: Defining Social Collateral in Microfinance Group Lending: Microfinance group lending with joint liability allows asset-poor individuals to replace physical collateral by social collateral. This paper provides a theoretical framework to evaluate the impact of social collateral pledged by group borrowers on group lending repayment. We take into account the external ties of group borrowers, i.e. the social ties linking borrowers to non-borrowers from their community, whereas previous work in this field has looked solely at internal ties (i.e. ties between group members). Our model stresses the impact of network configuration on the amount of social capital pledged as collateral. It shows why the group lending methodology works better in rural areas than in urban areas, namely because rural social networks are typically denser than urban ones, which results in higher social collateral.
    Abstract: The Economic Value of Social Capital:Empirical studies on the importance of social capital for poor households show divergent outcomes. This divergence may stem from the lack of a conceptual framework for capturing the social capital dimensions that deliver economic value to individuals. This paper defines individual social capital from an economic perspective and proposes a measurement based on the two dimensions of individual social capital that bring economic value to individuals: (1) informal risk insurance arrangements and (2) information advantages that arise from personal social networks. Using this measurement, I present a numerical application to argue that differing network configurations drive asymmetry of social interactions among individuals.
    Abstract: Social Capital and the Repayment of Microfinance Group Lending: A Case Study of Pro Mujer Mexico:In this paper, we investigate how social networks of group borrowers come into play in joint liability group lending. We use a large, original dataset with 802 mapped social networks of borrowers from Pro Mujer Mexico. We are the first to examine external ties, that is, social ties with individuals outside the borrowing group. We have two main findings. First, borrowers with stronger informal risk insurance arrangements are in better economic shape and have a higher capacity to pay than borrowers with weaker informal risk insurance arrangements. Second, borrowers who pledge valuable ties as social collateral have fewer repayment problems. We postulate that borrowers receive effective help from their ties in cases of need.
    Keywords: microfinance; social collateral; social capital; group lending; social capital measurement
    Date: 2016–01–20
  6. By: Tova Levin; Steven D. Levitt; John A. List
    Abstract: The wealthiest 10% of donors now give 90% of charitable dollars in the U.S., but little is known about what motivates them. Using a natural field experiment on over 5,000 high capacity donors, we find persistence in giving patterns, that signals of program quality influence giving, and that the price of giving is not unduly important. Unlike typical small donors, our givers respond only on the intensive margin, and often with a longer time lag. Our study highlights the value to practitioners of partnering with academics, as our intervention has generated $30 million in incremental donations to the University.
    JEL: C93 H4
    Date: 2016–03
  7. By: Harutyunyan, Ani; Özak, Ömer
    Abstract: This research explores the effects of culture on technological diffusion and economic development. It shows that culture's direct effects on development and barrier effects to technological diffusion are, in general, observationally equivalent. In particular, using a large set of cultural measures, it establishes empirically that pairwise differences in contemporary development are associated with pairwise cultural differences relative to the technological frontier, only in cases where observational equivalence holds. Additionally, it establishes that differences in cultural traits that are correlated with genetic and linguistic distances are statistically and economically significantly correlated with differences in economic development. These results highlight the difficulty of disentangling the direct and barrier effects of culture, while lending credence to the idea that common ancestry generates persistence and plays a central role in economic development.
    Keywords: Comparative economic development, economic growth, culture, barriers to technological diffusion, genetic distances, linguistic distances
    JEL: O10 O11 O20 O33 O40 O47 O57 Z10
    Date: 2016–04–04
  8. By: Anna Lou Abatayo (University of Hawaii at Manoa); John Lynham (University of Hawaii at Manoa); Katerina Sherstyuk (University of Hawaii at Manoa)
    Abstract: Communication is often critical for economic cooperation and enhancement of trust. Traditionally, direct face-to-face communication has been found to be more effective than any form of indirect, mediated communication. We study whether this is still the case given that many people routinely use texting and online social media to conduct economic transactions. In out laboratory experiment, groups of participants communicate either (i) face-to-face, (ii) through the most popular online social network – Facebook, or (iii) using text messaging, before participating in a public goods or a trust game. While people talk significantly more under traditional face-to-face, discussion through Facebook and text messages prove as effective as face-to-face communication in enhancing cooperation and increasing trust. For all three media, discussions that focus on the game of use more positive emotion words are correlated with enhanced trust. It appears that young American adults are now just as adept at communicating and reducing social distance online as they are in person.
    Keywords: communication technology; laboratory experiments; public good games; trust games
    JEL: C91 C92 D03 D71
    Date: 2015–09
  9. By: Doan, Quang Hung; Vu, Hoang Nam
    Abstract: By using the latest dataset from the survey of SMEs conducted in Vietnam in 2011, we show that a firm both participating in a wider network of input suppliers, buyers, and associations of enterprises and conducting innovative activities in production has higher labor productivity than others, implying that networks of enterprises and innovation are complementary to each other in affecting performance of SMEs in Vietnam. We also find that supports of the government including providing better infrastructure to the SMEs and helping the SMEs to be formalized when being established are conducive to the development of the SMEs in Vietnam.
    Keywords: Complementary, supermodularity, Network, Innovation, SMEs.
    JEL: D58 O3
    Date: 2016–01
  10. By: Cabrales, Antonio; Feri, Francesco; Gottardi, Piero; Meléndez-Jiménez, Miguel A.
    Abstract: This paper reports on experiments testing the viability of markets for cheap talk information. We find that these markets are fragile. The reasons are surprising given the previous experimental results on cheap-talk games. Our subjects provide low-quality information even when doing so does not increase their monetary payoff. We show that this is not because subjects play a different (babbling) equilibrium. By analyzing subjects’ behavior in another game, we find that those adopting deceptive strategies tend to have envious or non-pro-social traits. The poor quality of the information transmitted leads to a collapse of information markets.
    Keywords: Experiment, Cheap talk, Auction, Information Acquisition, Information Sale
    JEL: D83 C72 G14
    Date: 2016

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