nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2016‒10‒02
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Morality: evolutionary foundations and policy implications By Alger, Ingela; Weibull, Jörgen
  2. Incentives and Ethics in the Economics of Body Parts By Nicola Lacetera
  3. How Do Rights Revolutions Occur? Free Speech and the First Amendment By Chen, Daniel L.; Yeh, Susan
  4. A Theory of Community Formation and Social Hierarchy By Athey, Susan; Calvano, Emilio; Jha, Saumitra
  5. Gender differences and social ties effects in resource sharing By d'Exelle, Ben; Riedl, Arno
  6. Social Identity and Group Contests By Zaunbrecher, Henrik; Riedl, Arno
  7. Urban Networks: Connecting Markets, People, and Ideas By Glaeser, Edward L.; Ponzetto, Giacomo A. M.; Zou, Yimei
  8. Groups and trust: Distributive Justice with Production and the Social Contract. An Experimental study By Giacomo Degli Antoni; Marco Faillo; Lorenzo Sacconi; Pedro Francés-Gomez
  9. Trust under the Prospect Theory and Quasi-Hyperbolic Preferences: A Field Experiment in Vietnam By Quang Nguyen; Marie Claire Villeval; Hui Xu
  10. Why Family Matters: The Impact of Family Resources on Immigrant Entrepreneurs’ Exit from Entrepreneurship By Bird, Miriam; Wennberg, Karl

  1. By: Alger, Ingela; Weibull, Jörgen
    Abstract: Since the publication of Adam Smithís Wealth of Nations, it has been customary among economists to presume that economic agents are purely selfinterested. However, research in experimental and behavioral economics has shown that human motivation is more complex and that observed behavior is often better explained by additional motivational factors such as a concern for fairness, social welfare etc. As a complement to that body of work we have carried out theoretical investigations into the evolutionary foundations of human motivation (Alger and Weibull 2013, 2016). We found that natural selection, in starkly simpliÖed but mathematically well-structured environments, favors preferences that combine self-interest with morality. Roughly speaking, the moral component evaluates oneís own action in terms of what would happen, if, hypothetically, this action were adopted by others. Such moral preferences have important implications for economic behavior. They motivate individuals to contribute to public goods, to give fair o§ers when they could get away with cheap o§ers, and to contribute to social institutions and act in environmentally friendly ways even if their individual impact is negligible.
    Date: 2016–08
  2. By: Nicola Lacetera
    Abstract: Research shows that properly devised economic incentives increase the supply of blood without hampering its safety; similar effects may be expected also for other body parts such as bone marrow and organs. These positive effects alone, however, do not necessarily justify the introduction of payments for supplying body parts; these activities concern contested commodities or repugnant transactions, i.e. societies may want to prevent certain ways to regulate a transaction even if they increased supply, because of ethical concerns. When transactions concern contested commodities, therefore, societies often face trade-offs between the efficiency-enhancing effects of trades mediated by a monetary price, and the moral opposition to the provision of these payments. In this essay, I first describe and discuss the current debate on the role of moral repugnance in controversial markets, with a focus on markets for organs, tissues, blood and plasma. I then report on recent studies focused on understanding the trade-offs that individuals face when forming their opinions about how a society should organize certain transactions.
    JEL: D47 D63 D64 I11 K32 Z13
    Date: 2016–09
  3. By: Chen, Daniel L.; Yeh, Susan
    Abstract: Does law shape values? We test a model of law and norms using an area of law where economic incentives are arguably not the prime drivers of social change. From 1958–2008, Democratic judges were more likely than Republicans to favor progressive free speech standards. Using the random assignment of U.S. federal court judges setting geographically-local precedent, we estimate that progressive free speech standards liberalized sexual attitudes and behaviors and increased both crime rates and the spread of sexually transmitted diseases. We then randomly allocated data entry workers to enter newsarticles of court decisions. Progressive decisions liberalized sexual attitudes and shifted norm perceptions for data entry subjects, but not self-reported behavior. These results present evidence of law’s expressive power – with fundamental implications for decision making in social and political settings and for the empirical predictions of theoretical models in these domains.
    Keywords: Law and norms, expressive law, cultural change
    JEL: J12 J16 K42 N32 N42 Z1
    Date: 2016
  4. By: Athey, Susan (Stanford University); Calvano, Emilio (Bologna University); Jha, Saumitra (Stanford University)
    Abstract: We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups--communities--that allow repeated interaction. Hierarchies provide incentives for loyalty and allow individuals to trust agents to extent that the agents are actually trustworthy. We contrast these with other plausible institutions for engendering loyalty that require inefficient withholding of trust to support group norms, and are not robust to coalitional deviations. In communities whose members randomly match, we show that social mobility within hierarchies falls as temptations to cheat rise. In communities where individuals can concentrate their trading with pre-selected members, hierarchies where senior members are favored for trade sustain trust even in the presence of proximate nonhierarchical communities. We link these results to the emergence of trust in new market environments and early human societies.
    Date: 2016–08
  5. By: d'Exelle, Ben (university of east anglia); Riedl, Arno (General Economics 1 (Micro))
    Abstract: In rural areas in developing countries gender inequality tends to be severe which might have substantial welfare implications if it determines how scarce economic resources are shared between men and women. Therefore, it is important to know how gender influences resource sharing and - given the strong embeddedness of resource sharing in social networks - in what ways social ties interact with this influence. To investigate this, we combine data from resource allocation experiments and a social network survey in rural Nicaragua. We find that women share less than men, and that this difference is largest among people of the same village and of different gender. We also find that social ties exert an important influence on sharing and that women have fewer friendship ties within their village than men. Regression analysis shows important gender differences in the effect of social ties on sharing. While both men and women share more with female friends than with female non-friends, women share less with male friends than with male non-friends. We also find that with controls for friendship ties, there remains a direct gender effect on within-village sharing, with men sharing more than women. Finally, we find that our results are robust to potential gender differences in the reporting of social ties.
    Keywords: resource sharing, social ties, gender, lab-in-the-field experiment, Nicaragua
    JEL: C90 Z10
    Date: 2016
  6. By: Zaunbrecher, Henrik (General Economics 1 (Micro)); Riedl, Arno (General Economics 1 (Micro))
    Abstract: Social identity has been shown to successfully enhance cooperation and effort in cooperation and coordination games. Little is known about the causal effect of social identity on the propensity to engage in group conflict. In this paper we explore theoretically and experimentally whether social identity increases investments in group contests. We show theoretically that increased social identity with the own group implies higher investments in Tullock contests. Empirically we find that induced social identity does increase group closeness but does not increase conflict investments.
    Keywords: social identity, group, contest, experiment
    JEL: C92 D03 D71 D74
    Date: 2016
  7. By: Glaeser, Edward L. (Harvard University); Ponzetto, Giacomo A. M. (Universitat Pompeu Fabra and Barcelona GSE); Zou, Yimei (Universitat Pompeu Fabra)
    Abstract: Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe's mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits.
    Date: 2015–12
  8. By: Giacomo Degli Antoni (University of Parma, Department of Law); Marco Faillo (University of Trento); Lorenzo Sacconi (University of Trento); Pedro Francés-Gomez (University of Granada)
    Abstract: Drawing on the theoretical and experimental literature on distributive justice, we put some assumptions of the contractarian argument to an empirical test by means of an experiment which investigates the influence that explicit agreement under the veil of ignorance may have on individuals' conception of justice and its implementation in a context of the production and distribution of a common output. One crucial characteristic of our experiment is that subjects are assigned unequal endowments for which they are not responsible; the assignment is random. At the same time, their work naturally generates unequal levels of earnings. Do the subjects involved in this interaction distinguish between the two types of inequality? Do they try to reduce the arbitrary one, while accepting the one generated through effort? Do they elaborate other distributive criteria? Does their choice ex-ante, when they are behind the veil, differ from their choice ex-post once the veil has been lifted and they know the outcome of the production phase? The main result is that the agreement under a veil of ignorance induces subjects to accept a liberal egalitarian division rule not only in the ex-ante agreement, but also in the actual implementation of the pie division, even if this contradicts their self-interest and some common economic assumptions about reciprocal expectations of rationality. In addition, our results show that deliberating through open discussion increases the level of ex-post compliance.
    Keywords: Trust; Distributive justice, social contract, fairness, dictator game, contractarian business ethics
    JEL: C72 C91 D02 D63
  9. By: Quang Nguyen (Middlesex University [London] - Middlesex University); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Hui Xu (Beijing Normal University, GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Virtually every commercial transaction has within itself an element of trust, certainly any transaction conducted over a period of time. It can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence. (Arrow 1972)
    Keywords: risk preferences, time preferences, Cumulative Prospect Theory, Vietnam, field experiment, trustworthiness,trust
    Date: 2016
  10. By: Bird, Miriam (Center for Family Business, University of St. Gallen); Wennberg, Karl (Stockholm School of Economics, Institute of Analytical Sociology (IAS) and the Ratio Institute)
    Abstract: We integrate insights from the social embeddedness perspective with research on immigrant entrepreneurship to theorize on how family resources influence exit from entrepreneurship among previously unemployed immigrant entrepreneurs. Results from a cohort study of immigrant entrepreneurs in Sweden reveal that family resources are important for immigrants to integrate economically into a country. We find that having family members in geographical proximity increases immigrant entrepreneurs’ likelihood of remaining in entrepreneurship. Further, family financial capital enhances immigrant entrepreneurs’ likelihood of remaining in entrepreneurship as well as their likelihood of exiting to paid employment. Although often neglected in immigrant entrepreneurship studies, resources accruing from spousal relationships with natives influence entrepreneurs’ exit behavior. We discuss contributions for research on entrepreneurial exit, entrepreneurs’ social embeddedness, and immigrant entrepreneurship.
    Keywords: Immigrant entrepreneurship; entrepreneurial exit; family resources; social embeddedness; relational embeddedness
    JEL: J60 L26
    Date: 2016–09–26

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