nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒02‒12
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. The Swing Voter's Curse in Social Networks By Berno Buechel; Lydia Mechtenberg
  2. Estimating Social Preferences and Gift Exchange at Work By Stefano DellaVigna; John List; Ulrike Malmendier; Gautam Rao
  3. Credit Scores, Social Capital, and Stock Market Participation By Jesse Bricker; Geng Li
  4. Exposure to Refugees and Voting for the Far-Right. (Unexpected) Results from Austria By Steinmayr, Andreas
  5. An online experiment on cooperation and groupishness across urban districts By Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
  6. On the Origins and Consequences of Racism By Farfan-Vallespin, Antonio; Bonick, Matthew
  7. Do Neighbors Help Finding a Job? Social Networks and Labor Market Outcomes After Plant Closures By Jahn, Elke J.; Neugart, Michael
  8. Altruistic Norm Enforcement and Decision-Making Format in a Dilemma: Experimental Evidence By Kamei, Kenju
  9. The Market-Promoting and Market-Preserving Role of Social Trust in Reforms of Policies and Institutions By Berggren, Niclas; Bjørnskov, Christian
  10. Distrust in Experts and the Origins of Disagreement By Alice Hsiaw; Ing-Haw Cheng
  11. Social Media and Political Donations: New Technology and Incumbency Advantage in the United States By Petrova, Maria; Sen, Ananya; Yildirim, Pinar
  12. Neighbors and Friends: The Effect of Globalization on Party Positions By Ftergioti, Stamatia

  1. By: Berno Buechel (University of St. Gallen and Liechtenstein-Institute); Lydia Mechtenberg (University of Hamburg)
    Abstract: We study private communication in social networks prior to a majority vote on two alternative policies. Some (or all) agents receive a private imperfect signal about which policy is correct. They can, but need not, recommend a policy to their neighbors in the social network prior to the vote. We show theoretically and empirically that communication can undermine efficiency of the vote and hence reduce welfare in a common interest setting. Both efficiency and existence of fully informative equilibria in which vote recommendations are always truthfully given and followed hinge on the structure of the communication network. If some voters have distinctly larger audiences than others, their neighbors should not follow their vote recommendation; however, they may do so in equilibrium. We test the model in a lab experiment and strong support for the comparative-statics and, more generally, for the importance of the network structure for voting behavior.
    Keywords: Strategic Voting, Social Networks, Swing Voter's Curse, Information Aggregation
    JEL: D72 D83 D85 C91
    Date: 2017–01
  2. By: Stefano DellaVigna; John List; Ulrike Malmendier; Gautam Rao
    Abstract: We design a model-based field experiment to estimate the nature and magnitude of workers' social preferences towards their employers. We hire 446 workers for a one-time task. Within worker, we vary (i) piece rates; (ii) whether the work has payoffs only for the worker, or also for the employer; and (iii) the return to the employer. We then introduce a surprise increase or decrease in pay ('gifts') from the employer. We find that workers have substantial baseline social preferences towards their employers, even in the absence of repeated-game incentives. Consistent with models of warm glow or social norms, but not of pure altruism, workers exert substantially more effort when their work is consequential to their employer, but are insensitive to the precise return to the employer. Turning to reciprocity, we find little evidence of a response to unexpected positive (or negative) gifts from the employer. Our structural estimates of the social preferences suggest that, if anything, positive reciprocity in response to monetary 'gifts' may be larger than negative reciprocity. We revisit the results of previous field experiments on gift exchange using our model and derive a one-parameter expression for the implied reciprocity in these experiments.
    Date: 2016
  3. By: Jesse Bricker; Geng Li
    Abstract: While a rapidly growing body of research underscores the influence of social capital on financial decisions and economic developments, objective data-based measurements of social capital are lacking. We introduce average credit scores as an indicator of a community's social capital and present evidence that this measure is consistent with, but richer and more robust than, those used in the existing literature, such as electoral participation, blood donations, and survey-based measures. Merging unique proprietary credit score data with two nationwide representative household surveys, we show that households residing in communities with higher social capital are more likely to invest in stocks, even after controlling for a rich set of socioeconomic, preferential, neighborhood, and demographic characteristics. Notably, such a relationship is robustly observed only when social capital is measured using community average credit scores. Consistent with the notion that social capital and trust promote stock investment, we find the following: first, the association between average credit score and stock ownership is more pronounced among the lower educated; second, social capital levels of the county where one grew up appear to have a lasting influence on future stock investment; and third, investors who did not own stocks before have a greater chance of entering the stock market a few years after they relocate to higher-score communities.
    Keywords: Credit scores ; Social Capital ; Stock market participation ; Trust
    JEL: D14 G10 O16
    Date: 2017–02
  4. By: Steinmayr, Andreas
    Abstract: The massive increase in the number of arriving refugees in Europe in 2015 creates enormous economic and political challenges in the receiving countries. An important concern is that the inflow of refugees increases the support for far-right, nationalist, anti-immigration parties. This paper studies a natural experiment in an Austrian state to identify the causal effect of exposure to refugees in the neighborhood on the support for the far-right Freedom Party of Austria (FPÖ). Before the local and state elections in September 2015 the inflow of refugees dominated the entire pre-electoral discussion and the FPÖ - with a fierce anti-asylum campaign - doubled its vote share in this election. At the time of the election, 42 percent of Upper Austrian communities hosted refugees, which provides variation in the exposure to refugees at the community level. To account for the potential endogeneity in the distribution of refugees, I use the availability of existing group accommodations as instrumental variable. To cope with the sudden inflow of large number of refugees, these buildings were used as accommodation and their existence strongly increases the probability of refugee presence. In line with the contact hypothesis I find that hosting refugees in the community decreases the support for the FPÖ by 4.42 percentage points in state elections and increases the optimism in the population that the integration of refugees can be managed. The effects are robust to a series of sensitivity and placebo checks.
    JEL: D72 J15 P16
    Date: 2016
  5. By: Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
    Abstract: We present experimental evidence that illuminates the trade-off between efficiency considerations and social identity concerns in an inter-city multilevel public goods game. In total, 616 inhabitants of Heidelberg and Mannheim take part in an online experiment in which they can allocate an initial endowment between a private account, an excludable (local) public good, and a non-excludable (regional) public good. We vary the efficiency of the two public goods and find that participants substitute contributions away from the local to the regional public good if the latter is more efficient. To investigate the role of social identity considerations we compare a condition in which the group composition in unknown to a decision in which participants are informed that they share the local public good with three other participants from their own neighborhood. We do not find that a salient common social affiliation affects participants’ behavior per se. If the common local affiliation is revealed through a label, only citizens perceiving a strong local identification adjust their contribution behavior and contribute more to the excludable local public good. Revealing the local affiliation becomes even more effective in a priming condition when participants are remembered of their common local affiliation before they indicate their contribution decision.
    JEL: C90 D70 H41
    Date: 2016
  6. By: Farfan-Vallespin, Antonio; Bonick, Matthew
    Abstract: We use a novel method to measure racism at both the individual and the country level. We show that our measure of racism has a strong negative and significant impact on economic development, quality of institutions and education. We then test different hypotheses concerning the origin of racism and its channels of impact in order to establish causality. We find that racism is not correlated with any possible measure of coexistence of different racial or ethnic groups, like ethno-linguistic fragmentation, share of migrants, or ethnically-motivated conflicts among others. Racism has a negative effect on social capital measured as generalized trust and voice and accountability. More importantly, we show that for former colonies, racism is strongly correlated with the presence of extractive institutions during the colonial time, even when we control for current institutions, current GDP per capita or current education. We argue that extractive colonial institutions not only had a negative impact on the political and economic institutions of the colonized countries, but also shaped the cultural values of the population. We claim that colonial powers instilled racism among the population of their colonies in order to weaken their ability for collective action, justify their own role as extractive elite in the eyes of the ruled and facilitate the internal cohesion of the elite. We also show that, at the individual level and using country fixed effects, racism is negatively correlated with those cultural values that one would expect if an extractive elite would be able to decide the cultural values of the society they control: lower trust, higher obedience, lower respect for others, lower feeling of control of one's live, lower preference for democracy, higher support for military intervention of the government, lower preference for political participation, lower valuation of civil rights, higher preference for state intervention in the economy, lower support for economic competition, and higher acceptance of dishonest behavior. We finally show that racism still has a significant impact on our outcome variables even when we control for these potential cultural correlates.
    JEL: O10 P48 N00
    Date: 2016
  7. By: Jahn, Elke J. (University of Bayreuth); Neugart, Michael (Darmstadt University of Technology)
    Abstract: Social networks may affect workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether the employment status of neighbors influences the employment probability of a worker who lost his job due to a plant closure and the channels through which this occurs. Our findings suggest that a ten percentage point higher neighborhood employment rate increases the probability of having a job six months after displacement by 0.9 percentage points. The neighborhood effect seems to be driven not by social norms but by information transmission at the neighborhood level, and additionally by networks of former co-workers who also lost their jobs due to plant closure.
    Keywords: social networks, job search, neighborhood, employment, wages, plant closures
    JEL: J63 J64 R23
    Date: 2017–01
  8. By: Kamei, Kenju
    Abstract: Past research has shown that people often take punitive actions towards norm violators even when they are not directly involved in transactions. However, it at the same time suggests that such third-party punishment may not be strong enough to enforce cooperation norms in dilemma situations. This paper experimentally compares the effectiveness of third-party punishment between different enforcement formats. Consistent with past studies, our data shows that having an individual third-party punisher in a group does not make one’s defection materially unbeneficial because of the weak punishment intensity. It also shows that third-party punishment is not effective when two individuals form a pair as a punisher and jointly decide how strong third-party punishment they impose. However, third-party punishment can be sufficiently strong to enforce cooperation norms when a third-party punisher’s action choice is made known to another individual third-party punisher in a different group, or when there are two independent individual third-party players in a group.
    Keywords: experiment, cooperation, dilemma, third-party punishment, social norms
    JEL: C92 D79 H41
    Date: 2017–02–06
  9. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Aarhus University)
    Abstract: Social trust has been identified as a catalyst for reforms. We take the literature further in two ways. First, we make a fine-grained analysis of mechanisms through which social trust enables liberalizing reforms – by strengthening the ability to overcome obstacles in the political process (stemming from ideology, ideological fractionalization, coalition government, minority government and legislature-seat instability). Second, we define reforms as distinct changes in the quality of the legal institutions and in the scope of regulation and separate reforms that increase economic freedom in these two areas from reforms that decrease it. We study separately how social trust, interacted with the different types of political hindrances, affects the probability of reforms. We find a dual role of social trust in the political process – facilitating liberalizing reforms and making de-liberalizing ones more difficult. This result suggests that trust does not make agreement on any reform more probable – the content of the reform matters. Other research shows that trust is associated with a positive view of market actors, which indicates that only reforms that strengthen the market economy are more easily agreed upon in the presence of trust.
    Keywords: Reforms; Liberalization; Social trust; Ideology; Fractionalization; Coalition government
    JEL: H11 P11 P48 Z13
    Date: 2017–02–02
  10. By: Alice Hsiaw (Brandeis University); Ing-Haw Cheng (Brandeis University)
    Abstract: Disagreements about substance and expert credibility often go hand-in-hand and are hard to resolve on several issues including economics, climate science, and medicine. We argue that disagreement arises because individuals overinterpret how much they can learn when both substance and credibility are uncertain. Our learning bias predicts that: 1) Disagreement about credibility drives disagreement about substance, 2) First impressions of credibility drive long-lasting disagreement, 3) Under-trust is difficult to unravel, 4) Encountering experts in different order generates disagreement, and 5) Confirmation bias and/or its opposite arise endogenously. These effects provide a theory for the origins of disagreement.
    Keywords: disagreement, polarization, learning, expectations, experts
    Date: 2016–10
  11. By: Petrova, Maria; Sen, Ananya; Yildirim, Pinar
    Abstract: Can new technologies increase political competition? We study the impact of adopting Twitter on campaign contributions received by politicians. For identification, we compare donations just before and just after politicians open Twitter accounts in regions with high and low levels of Twitter penetration, controlling for politician-month fixed effects. We estimate that opening a Twitter account amounts to an increase of at least 2-3% in donations per campaign. This effect is stronger for new politicians, who were never elected before, for donations coming from new donors, for politicians who tweet more informatively, and for politicians from regions with lower newspaper circulation.
    Date: 2017–01
  12. By: Ftergioti, Stamatia
    Abstract: This paper seeks to examine the effect of economic, social and political globalization on parties’ overall positions. Our empirical analysis is based on a panel model of 34 political parties in 17 west European countries between 1970 and 2010. We find that both economic and social globalization have a significant effect on parties’ positions, whereas political globalization seems to have less of an influence. However, the effect of globalization varies depending on the type of political party. Right-wing parties move leftward in response to all types of globalization while left-wing parties do not alter their position, or move rightward. Moreover, we find strong evidence about party’s influence of the positions that parties in other countries take. These findings give support for the existence of parties’ convergence in the face of globalization with right-wing parties coming closer to left-wing parties, rejecting the established in the literature argument of the so-called “neoliberal convergence”.
    Keywords: party’s position; globalization; partisan politics; panel data
    JEL: F15 H5
    Date: 2017–01–01

This nep-soc issue is ©2017 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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