nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒01‒15
eight papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Learning to trust, learning to be trustworthy By Berger, Ulrich
  2. Migrant Intentions to Return: The Role of Migrant Social Networks By Catia Batista; Francesco Cestari
  3. Assessing the role of social networks on migrant labor market outcomes: Evidence from a representative immigrant survey By Catia Batista; Ana Isabel Costa
  4. Immigration enforcement and crime By Paolo Pinotti
  5. The Nexus Between Social Capital and Bank Risk Taking By Xie, Wenjing; Ding, Haoyuan; Chong, Terence Tai Leung
  6. Social Image and Economic Behavior in the Field: Identifying, Understanding and Shaping Social Pressure By Leonardo Bursztyn; Robert Jensen
  7. Gender Peer Effects Heterogeneity in Obesity By Rokhaya Dieye; Bernard Fortin
  8. When You Know Your Neighbour Pays Taxes: Information, Peer Effects, and Tax Compliance By James Alm; Kim M. Bloomquist; Michael McKee

  1. By: Berger, Ulrich
    Abstract: Interpersonal trust is a one-sided social dilemma. Building on the binary trust game, we ask how trust and trustworthiness can evolve in a population where partners are matched randomly and agents sometimes act as trustors and sometimes as trustees. Trustors have the option to costly check a trustee's last action and to condition their behavior on the signal they receive. We show that the resulting population game admits two components of Nash equilibria. Nevertheless, the long-run outcome of an evolutionary social learning process modeled by the best response dynamics is unique. Even if unconditional distrust initially abounds, the trustors' checking option leads trustees to build a reputation for trustworthiness by honoring trust. This invites free-riders among the trustors who save the costs of checking and trust blindly, until it does no longer pay for trustees to behave in a trustworthy manner. This results in cyclical convergence to a mixed equilibrium with behavioral heterogeneity where suspicious checking and blind trusting coexist while unconditional distrust vanishes. (author's abstract)
    Keywords: trust game; evolutionary game theory; reputation; best response dynamics
    Date: 2016–01
  2. By: Catia Batista; Francesco Cestari
    Abstract: Social ties are potentially an important determinant of migrants’ intentions to return to their home country. This relationship has, however, not been addressed in the economics literature on international migration. This study examines the absolute and relative importance of migrant social networks, at both destination and origin, on migrant return intentions. Using rich data on social networks of immigrants, we explore the effects of heterogeneous characteristics of social network members on different time horizons for return. After controlling for unobserved heterogeneity and reverse causality biases, we find that the social network at home seems to be the most important determinant of the migrant’s intention to return home within five to ten years. JEL codes: D8, F22, J15, J61
    Keywords: International migration, Return migration, return intentions, Social networks
    Date: 2016
  3. By: Catia Batista; Ana Isabel Costa
    Abstract: What role do social networks play in determining migrant labor market outcomes? We examine this question using data from a random sample of 1500 immigrants living in Ireland. We propose a theoretical model formally predicting that immigrants with more contacts have additional access to job offers, and are therefore better able to become employed and choose higher paid jobs. Our empirical analysis confirms these findings, while focusing more generally on the relationship between migrants’ social networks and a variety of labor market outcomes (namely wages, employment, occupational choice and job security), contrary to the literature. We find evidence that having one more contact in the network is associated with an increase of 11pp in the probability of being employed and with an increase of about 100 euros in the average salary. However, our data is not suggestive of a network size effect on occupational choice and job security. Our findings are robust to sample selection and other endogeneity concerns. JEL codes: D8, F22, J3
    Keywords: Social networks, International migration, Wage determination, Labor market integration
    Date: 2016
  4. By: Paolo Pinotti
    Abstract: Immigration enforcement has ambiguous implications for the crime rate of undocumented immigrants. On the one hand, expulsions reduce the pool of immigrants at risk of committing crimes, on the other they lower the opportunity cost of crime for those who are not expelled. We estimate the e?ect of expulsions on the crime rate of undocumented immigrants in Italy exploiting variation in enforcement toward immigrants of di?erent nationality, due to the existence of bilateral agreements for the control of illegal migration. We ?nd that stricter enforcement of migration policy reduces the crime rate of undocumented immigrants.
    Keywords: immigration, enforcement, crime
    JEL: K37 K42
    Date: 2015
  5. By: Xie, Wenjing; Ding, Haoyuan; Chong, Terence Tai Leung
    Abstract: This study explores social capital and its relevance to bank risk taking across countries. Our empirical results show that the levels of bank risk taking are lower in countries with higher levels of social capital, and that the impact of social capital is mainly reflected by the reduced value of the standard deviation of return on assets. Moreover, the impact of social capital is found to be weaker when the legal system lacks strength. Furthermore, the study considers the impacts of social capital of the banks’ largest shareholders in these countries and finds that high levels of social capital present in these countries exert a negative effect on bank risk taking, but the effect is not strongly significant.
    Keywords: social capital; bank risk taking; trust
    JEL: G21 Z13
    Date: 2016–06–29
  6. By: Leonardo Bursztyn; Robert Jensen
    Abstract: Many people care about how they are perceived by those around them. A number of recent field experiments in economics have found that such social image concerns can have powerful effects on a range of behaviors. In this paper, we first review this recent literature aimed at identifying social image concerns or social pressure. We then highlight and discuss two important areas that have been comparatively less well-explored in this literature: understanding social pressure, including the underlying mechanisms, and whether such pressure can be shaped or influenced.
    JEL: D1 I31 Z13
    Date: 2016–12
  7. By: Rokhaya Dieye; Bernard Fortin
    Abstract: This paper explores gender peer effects heterogeneity in adolescent Body Mass Index (BMI). We propose a utility-based non-cooperative social network model with effort technology. We allow the gender composition to influence peer effects. We analyze the possibility of recovering the fundamentals of our structural model from the best-response functions. We provide identification conditions of these functions generalizing those of the homogeneous version of the model. Extending Liu and Lee [2010], we consider 2SLS and GMM strategies to estimate our model using Add Health data. We provide tests of homophily in the formation of network and reject them after controlling for network (school) fixed effects. The joint (endogenous plus contextual) gender homogeneous model is rejected. However, we do not reject that the endogenous effects are the same. This suggests that the source of gender peer effects heterogeneity is the contextual effects. We find that peers’ age, parents’ education, health status, and race are relevant for the latter effects and are gender-dependent.
    Keywords: Obesity, Social Networks, Gender, Heterogeneity, Peer Effects, Identification, Add Health,
    JEL: L12 C31 Z13 D85
    Date: 2017–01–11
  8. By: James Alm (Department of Economics, Tulane University); Kim M. Bloomquist (Taxpayer Advocate Service, U.S. Internal Revenue Service); Michael McKee (Department of Economics, Appalachian State University)
    Abstract: In this paper, we suggest that individuals' tax compliance behaviours are affected by the behaviour of their "neighbours", or those about whom they may have information, whom they may know, or with whom they may interact on a regular basis. Individuals are more likely to file and to report their taxes when they believe that other individuals are also filing and reporting their taxes; conversely, when individuals believe that others are cheating on their taxes, they may well become cheaters themselves. We use experimental methods to test the role of such information about peer effects on compliance behaviour. In one treatment setting, we inform individuals about the frequency that their neighbours submit a tax return. In a second treatment setting, we inform them about the number of their neighbours who are audited, together with the penalties that they pay. In both cases, we examine the impact of information on filing behaviour and also on subsequent reporting behaviour. We find that providing information on whether one's neighbours are filing returns and/or reporting income has a statistically significant and economically large impact on individual filing and reporting decisions. However, this "neighbour" information does not always improve compliance, depending on the exact content of the information.
    Keywords: Tax evasion, Tax compliance, Behavioural economics, Experimental economics.
    JEL: H26 C91
    Date: 2016–12

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