nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒03‒19
eight papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. The effects of group composition in a strategic environment: Evidence from a field experiment By John List; William Neilson; Michael Price
  2. Gun violence in the U.S.: Correlates and causes By Kukharskyy, Bohdan; Seiffert, Sebastian
  3. Is trustworthiness written on the face? By Dilger, Alexander; Müller, Julia; Müller, Michael
  4. The Historical State, Local Collective Action, and Economic Development in Vietnam By Melissa Dell; Nathaniel Lane; Pablo Querubin
  5. Do neighbors help finding a job? Social networks and labor market By Jahn, Elke Jutta; Neugart, Michael
  6. From personalized exchange towards anonymous trade: A field experiment on the workings of the invisible hand By Erwin Bulte; Andreas Kontoleon; John List; Ty Turley; Maarten Voors
  7. Deservingness, Self-Interest and the Welfare State: Why Some Care More about Deservingness than Others and Why It Matters By Charlotte Cavaillé
  8. How do inventor networks affect urban invention? By Laurent Bergé; Nicolas Carayol, GREThA, UMR CNRS 5113, Université de Bordeaux; Pascale Roux

  1. By: John List; William Neilson; Michael Price
    Abstract: Recent theoretical and empirical studies have explored the effect of group membership and identity on individual decision-making. This line of research highlights that economic models focusing on the individual as the sole entity in the decision-making environment potentially miss critical features. This study takes this literature in a new direction by overlaying a field experiment onto a setting where groups have arisen naturally. Our experimental laboratory is large open air markets, where we are able to examine the effects of group membership on seller's collusive behavior as measured by prices and surplus allocations. This permits us to explore strategic implications of group composition. Empirical results illustrate the importance of group composition on pricing decisions, and show that deviations from Nash equilibrium are crucially related to group membership.
    Date: 2016
  2. By: Kukharskyy, Bohdan; Seiffert, Sebastian
    Abstract: This paper provides a county-level investigation of the root causes of gun violence in the U.S. To guide our empirical analysis, we develop a simple theoretical model which suggests that firearm-related offenses in a given county increase with the number of illegal guns and decrease with social capital and police intensity. Using detailed panel data from the Federal Bureau of Investigation for the period 1986-2014, we find empirical evidence for the causal effects of illegal guns, social capital, and police intensity consistent with our theoretical predictions. Based on our analysis, we derive a range of policy recommendations.
    Keywords: gun violence,illegal guns,social capital,police intensity
    JEL: K14 K42 J22 I18
    Date: 2017
  3. By: Dilger, Alexander; Müller, Julia; Müller, Michael
    Abstract: Trust is an important driver of economic transactions, but how do people decide whom to trust? We conduct an experiment to investigate whether people are able to predict trustworthiness by judging the face of a stranger. The behavior of the second player in the Trust Game is used as a measure of trustworthiness. Other subjects assess the trustworthiness of the second players of the Trust Game in the second stage using standardized photos of their faces. We find no significant interrelation in our statistical estimations between trustworthiness ratings and the behavior of the examined players. Surprisingly, players that were rated as more attractive sent back significantly less in the Trust Game.
    JEL: C72 C91 D03 D81 J71
    Date: 2017
  4. By: Melissa Dell; Nathaniel Lane; Pablo Querubin
    Abstract: This study examines how the historical state conditions long-run development, using Vietnam as a laboratory. Northern Vietnam (Dai Viet) was ruled by a strong centralized state in which the village was the fundamental administrative unit. Southern Vietnam was a peripheral tributary of the Khmer (Cambodian) Empire, which followed a patron-client model with weaker, more personalized power relations and no village intermediation. Using a regression discontinuity design across the Dai Viet-Khmer boundary, the study shows that areas historically under a strong state have higher living standards today and better economic outcomes over the past 150 years. Rich historical data document that in villages with a strong historical state, citizens have been better able to organize for public goods and redistribution through civil society and local government. This suggests that the strong historical state crowded in village-level collective action and that these norms persisted long after the original state disappeared.
    JEL: N15 O43
    Date: 2017–03
  5. By: Jahn, Elke Jutta; Neugart, Michael
    Abstract: Social networks may affect individual workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether neighbors' employment status influences an individual worker's employment probability after establishment closure and, if hired, his wage. Our findings suggest that a 10 percentage point higher neighborhood employment rate increases the probability of having a job after six months by 0.8 percentage points and daily earnings by 1.7 percent. The neighborhood effect seems not to be driven by social norms but information transmission via neighborhoods and, additionally, via former co-worker networks.
    JEL: J63 J64 R23
    Date: 2016
  6. By: Erwin Bulte; Andreas Kontoleon; John List; Ty Turley; Maarten Voors
    Abstract: The experimental literature has shown the tendency for experimental trading markets to converge to neoclassical predictions. Yet, the extent to which theory explains the equilibrating forces in markets remains under-researched, especially in the developing world. We set up a laboratory in 94 villages in rural Sierra Leone to mimic a real market. We implement several treatments, varying trading partners and the anonymity of trading. We find that when trading with co-villagers average efficiency is somewhat lower than predicted by theory (and observed in different contexts), and markets do not fully converge to theoretical predictions across rounds of trading. When participants trade with strangers efficiency is reduced more. Anonymizing trade within the village does not affect efficiency. This points to the importance of behavioral norms for trade. Intra-village social relationships or hierarchies, instead, appear less important as determinants of trading outcomes. This is confirmed by analysis of the trader-level data, showing that individual earnings in the experiment do not vary with one's status or position in local networks.
    Date: 2017
  7. By: Charlotte Cavaillé
    Abstract: A common assumption in political economy is that voters are self-regarding maximizers of material goods, choosing their preferred level of social spending accordingly. In contrast, students of American social policy have emphasized the key role of an other-regarding motive that makes support for social transfers conditional on the perceived deservingness of recipients. The two motives often conflict as large portions of the poor (rich) find recipients undeserving (deserving). Under what conditions might one motive trump the other? I argue that material self-interest overruns perceptions of deservingness when the share of income affected by social transfers is high. Using European data, I show that low (high) income individuals are less (more) likely to be driven by considerations of deservingness. This framework has important macro-level implications: the more working-age benefits are evenly spread across income groups, the less likely considerations of deservingness will permeate public debates on welfare state reform.
    Keywords: Social policy preferences, Deservingness, Self interest, Heuristic, Welfare state reform
    Date: 2015–09
  8. By: Laurent Bergé (CREA, Université du Luxembourg); Nicolas Carayol, GREThA, UMR CNRS 5113, Université de Bordeaux (GREThA, UMR CNRS 5113, Université de Bordeaux); Pascale Roux (GREThA, UMR CNRS 5113, Université de Bordeaux)
    Abstract: Social networks are expected to matter for invention in cities, but empirical evidence is still puzzling. In this paper, we provide new results on urban patenting covering more than twenty years of European patents invented by nearly one hundred thousand inventors located in France. Elaborating on the recent economic literatures on peer effects and on games in social networks, we assume that the productivity of an inventor’s efforts is positively affected by the efforts of his or her partners and negatively by the number of these partners’ connections. In this framework, inventors’ equilibrium outcomes are proportional to the square of their network centrality, which encompasses, as special cases, several well-known forms of centrality (Degree, Katz-Bonacich, Page-Rank). Our empirical results show that urban inventors benefit from their collaboration network. Their production increases when they collaborate with more central agents and when they have more collaborations. Our estimations suggest that inventors’ productivity grows sublinearly with the efforts of direct partners, and that they incur no negative externality from them having many partners. Overall, we estimate that a one standard deviation increase in local inventors’ centrality raises future urban patenting by 13%.
    Keywords: invention ; cities; network centrality; co-invention network; patent data
    JEL: O31 R11 D85
    Date: 2017

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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