nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒01‒01
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Trust in banks By Zuzana FUNGACOVA; Iftekhar HASAN; Laurent WEILL
  2. To trust is good, but to control is better: how investors discipline financial advisors’ activity By Riccardo Calcagno; Maela Giofré; Maria Cesira Urzì-Brancati
  3. The Economic Consequences of Social Network Structure By Matthew O. Jackson; Brian Rogers; Yves Zenou
  4. Diversity and Social Capital Within the Workplace: Evidence from Britain By Thomas Breda; Alan Manning
  5. Cities and the Structure of Social Interactions: Evidence from Mobile Phone Data By Konstantin Büchel und Maximilian von Ehrlich
  6. Social Preference and Governance: A Case Study in India By Dinda, Soumyananda
  7. Social Media Use and Children’s Wellbeing By Emily McDool; Phillip Powell; Jennifer Roberts; Karl Taylor
  8. "Many a slip between the cup and the lip": The effect of default-based nudges on prosocial behavior and attitudes By Gaudeul, Alexia; Kaczmarek, Magdalena Claudia
  9. How fully do people exploit their bargaining position? The effects of bargaining institution and the 50–50 norm By Nejat Anbarci; Nick Feltovich
  10. Social ties for labor market access - Lessons from the migration of East German inventors By Dorner, Matthias; Harhoff, Dietmar; Hinz, Tina; Hoisl, Karin; Bender, Stefan

  1. By: Zuzana FUNGACOVA (Bank of Finland); Iftekhar HASAN (Fordham University and Bank of Finland); Laurent WEILL (LaRGE Research Center, Université de Strasbourg)
    Abstract: Trust in banks is considered essential for an effective financial system, yet little is known about what determines trust in banks. Only a handful of single-country studies discuss the topic, so this paper aims to fill the gap by providing a cross-country analysis on the level and determinants of trust in banks. Using World Values Survey data covering 52 countries during the period 2010–2014, we observe large cross-country differences in trust in banks and confirm the influence of several sociodemographic indicators. Our main findings include: women tend to trust banks more than men; trust in banks tends to increase with income, but decrease with age and education; access to television enhances trust, while internet access erodes trust; and religious, political, and economic values may affect trust in banks. Notably, religious individuals tend to put greater trust in banks, but differences are observed across denominations. The holding of pro-market economic views is also associated with greater trust in banks.
    JEL: G21 O16 Z1
    Date: 2016
  2. By: Riccardo Calcagno (EMYLON Business School and CeRPñCollegio Carlo Alberto); Maela Giofré (University of Turin); Maria Cesira Urzì-Brancati (International Longevity Centre - UK)
    Abstract: Using a survey of clients from one of the largest Italian banks, we investigate whether investors exert some form of control over the quality of the recommendations they receive, and if so which one. We find that investors with low level of trust seek financial counselling, but decide autonomously. Within this subgroup of investors, those with high self-assessed financial competence are more likely to control the quality of the advice. We also observe that their test-based degree of financial literacy affects the way they discipline the advisors. Investors with high financial literacy monitor the advisor’s activity by themselves. Instead, investors with low financial literacy are more likely to search for a second expert’s opinion which confirms the recommendations previously received, as for credence services. Our findings suggest that access to different financial institutions is beneficial especially for investors with poor financial literacy.
    Date: 2016–03
  3. By: Matthew O. Jackson; Brian Rogers; Yves Zenou
    Abstract: We survey the literature on the economic consequences of the structure of social networks. We develop a taxonomy of ‘macro’ and ‘micro’ characteristics of social inter-action networks and discuss both the theoretical and empirical findings concerning the role of those characteristics in determining learning, diffusion, decisions, and resulting behaviors. We also discuss the challenges of accounting for the endogeneity of networks in assessing the relationship between the patterns of interactions and behaviors.
    Keywords: Social networks, social economics, homophily, diffusion, social learning, contagion, centrality measures, endogeneity, network formation.
    JEL: D85 C72 L14 Z13
    Date: 2016–11
  4. By: Thomas Breda; Alan Manning
    Abstract: This paper uses the British Workplace Employee Relations Survey to investigate the impact of gender and ethnic diversity on workers' level of trust in managers and the extent of identity with the values and objectives of the firm - dimensions of what we might call social capital within the workplace. These are both factors that one might expect to make firms more co-operative and, hence, productive. In contrast to much of the existing literature we pay particular attention to the estimation of causal effects, using an instrumental variable strategy. We find evidence that both women and minorities have higher levels of workplace trust and identity as individuals. But we also find evidence that a higher female share in the plant is associated with higher trust and identity (stronger for trust than identity) and that a higher minority share is associated lower trust and identity (stronger for identity than trust). However, in line with much of the literature, these results are not always significantly different from zero and they are sensitive to specification.
    Keywords: trust, identity, diversity, workplace
    JEL: M5
    Date: 2016–12
  5. By: Konstantin Büchel und Maximilian von Ehrlich
    Abstract: Social interactions are considered pivotal to urban agglomeration forces. This study employs a unique dataset on mobile phone calls to examine how social interactions differ across cities and peripheral areas. We first show that geographical distance is highly detrimental to interpersonal exchange. We then reveal that individuals residing in high-density locations do not benefit from larger social networks, but from a more efficient structure in terms of higher matching quality and lower clustering. These results are derived from two complementary approaches: Based on a link Formation model, we examine how geographical distance, network overlap, and sociodemographic (dis)similarities impact the likelihood that two agents interact. We further decompose the effects from individual, location, and time specific determinants on micro-level network measures by exploiting information on mobile phone users who change their place of residence.
    Keywords: Social Interactions; Agglomeration Externalities; Network Analysis; Sorting
    JEL: R1 R23 Z13 D85
    Date: 2016–12
  6. By: Dinda, Soumyananda
    Abstract: This study investigates the relationship between social choice and fiscal performance in India since 1991. Social choice is simple measurement in public affair activities like participating in election. Vote turnover in a democracy is taken to measure trust on institution. Social trust is considered as a proxy of social capital. Truly, the percentage vote turnover is the measurement of the level of citizens’ chance to express their preferences, which certainly help to increase governmental responsibility and accountability and thereby government performance. Here, the government is forced to be responsive to citizens’ preferences and the underlying social contract rule, which leads to a higher level of fiscal discipline. Using principal component analysis we construct social capital index that captures both structural and cultural aspects. Fiscal institution in India becomes weak in the post reform era. Group of politicians are much more interest about their local or regional issues than national issues even they are not interested to formulate regional development policy through discussion in the Parliament of India. Here higher value of social index indicates higher level of social trust as proxy of higher social capital. High social capital inversely affects the fiscal performance.
    Keywords: Social Preference, Trust, Social Capital, Vote Turnover, Institution, Performance of Government, Fiscal Performance
    JEL: D7 H0 H3 O1 O2 Z1 Z18
    Date: 2015–02
  7. By: Emily McDool (Department of Economics, University of Sheffield); Phillip Powell (Department of Economics, University of Sheffield); Jennifer Roberts (Department of Economics, University of Sheffield); Karl Taylor (Department of Economics, University of Sheffield)
    Abstract: Childhood circumstances and behaviours have been shown to have important persistent effects in later life. One aspect of childhood that has changed dramatically in the past decade, and is causing concern among policy makers and other bodies responsible for safeguarding children, is the advent of social media, or online social networking. This research explores the effect of children’s digital social networking on their subjective wellbeing. We use a large representative sample of 10-15 year olds over the period 2010 to 2014 from the UK Household Longitudinal Study, and estimate the effect of time spent chatting on social websites on a number of outcomes which reflect how these children feel about different aspects of their life, specifically: school work; appearance; family; friends; school attended; and life as a whole. We deal with the potential endogeneity of social networking via an instrumental variables approach using information on broadband speeds and mobile phone signal strength published by Ofcom. Our results suggest that spending more time on social networks reduces the satisfaction that children feel with all aspects of their lives, except for their friendships; and that girls suffer more adverse effects than boys. As well as addressing policy makers’ concerns about the effects of digital technology on children, this work also contributes to wider debates about the socioeconomic consequences of the internet and digital technologies more generally, a debate which to date has largely been based on evidence from outside of the UK.
    Keywords: digital society, social media, wellbeing, children
    JEL: D60 I31 J13
    Date: 2016–12
  8. By: Gaudeul, Alexia; Kaczmarek, Magdalena Claudia
    Abstract: Recent evidence suggests that default based nudges i.e. alterations in the decisional context, can have large effects on decision making and can be used as policy interventions to improve individual and public welfare. This paper presents the results of a controlled experiment (N = 988), designed to evaluate not only the effectiveness of a default manipulation on decision making, but also to explore how yielding or opposing a nudge intervention later affects attitudes (towards the nudge and the nudger) and behavior in a charity giving context. The results show that while the default nudge was effective at the time of application, it was not enough to change attitudes towards the nudged behavior as would be needed for long-term success. Indeed, we rather find that those who adopted an action that went against the nudge were more motivated to follow on through with this action later on than those who went with the nudge. We furthermore show that giving people more leeway in how to respond to a nudge improves acceptance of the nudge. We finally discuss the practical implications of our findings in terms of the applicability of default-based nudges as a tool for policy interventions.
    Keywords: nudging,defaults,decision making,prosocial behavior,charity giving,behavioral economics
    JEL: C9 D04 D12 D64 H41
    Date: 2016
  9. By: Nejat Anbarci; Nick Feltovich
    Abstract: A recurring puzzle in bargaining experiments is that individuals under–respond to changes in their bargaining position, compared to the predictions of standard bargaining theories. This result has been observed in a variety of settings, but there has been little systematic study of the factors associated with higher or lower responsiveness.We conduct a complete–information bargaining experiment using two institutions – the Nash demand game (NDG) and a related unstructured bargaining game (UBG) – and with bargaining power varied via the disagreement outcome. Importantly, in about one–fourth of bargaining pairs, one player’s disagreement payoff is more than half the cake size; in these cases, 50–50 splits are not individually rational. We find that subjects are least responsive to changes in bargaining position in the NDG with both disagreement payments below half the cake size. Responsiveness is higher in the UBG, and in the NDG when one disagreement payment is more than half the cake, but in both cases it is still less than predicted. It is only in the UBG with a disagreement payment more than half the cake that responsiveness reaches the predicted level. Our results imply that the extent to which actual bargaining corresponds to theoretical predictions will depend on (1) the institutions within which bargaining takes place, and (2) the distribution of bargaining power, in particular, whether the 50–50 norm yields a plausible focal point. We construct and analyse a simple model that characterises our main results.
    Keywords: Nash demand game; unstructured bargaining; real effort; equal split; experiment
    JEL: C78 C72 D81
    Date: 2016–11
  10. By: Dorner, Matthias; Harhoff, Dietmar; Hinz, Tina; Hoisl, Karin; Bender, Stefan
    Abstract: We study the impact of social ties on the migration of inventors from East to West Germany, using the fall of the Iron Curtain and German reunification as a natural experiment. We identify East German inventors via their patenting track records prior to 1990 and their social security records in the German labor market after reunification. Modeling inventor migration to West German regions after 1990, we find that Western regions with stronger historically determined social ties across the former East-West border attracted more inventors after the fall of the Iron Curtain than regions without such ties. However, mobility decisions made by inventors with outstanding patenting track records (star inventors) were not impacted by social ties. We conclude that social ties support labor market access for migrant inventors and determine regional choices while dependence on these ties is substantially reduced for star performers.
    JEL: J60 O30 P20 R23
    Date: 2016–12–06

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