nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒04‒23
eight papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Measuring Trust: A Reinvestigation By Billur Aksoy; Haley Harwell; Ada Kovaliukaite; Catherine Eckel
  2. The Impact of Cash Mobs in the Vote with the Wallet Game: Experimental Results. By Leonardo Becchetti; Maurizio Fiaschetti; Francesco Salustri
  3. Discrimination, social capital, and financial constraints: The case of Viet Nam By Tho Pham; Oleksandr Talavera
  4. Social networks, geographic proximity, and firm performance in Viet Nam By Emma Howard
  5. Inequality, ethnicity, and cross-group ties By Omar Shahabudin McDoom
  6. Horizontal inequality, status optimization, and interethnic marriage in a conflict-affected society By Omar Shahabudin McDoom
  7. Between Trust and Performance: Exploring Socio-Economic Mechanisms on Directed Weighted Regular Ring with Agent-Based Modeling By Gao, Lin
  8. Irrigation, Collectivism and Long-Run Technological Divergence By Johannes C. Buggle

  1. By: Billur Aksoy (Texas A&M University, Department of Economics); Haley Harwell (University of Richmond, Jepson School of Leadership Studies); Ada Kovaliukaite (Texas A&M University, Department of Economics); Catherine Eckel (Texas A&M University, Department of Economics)
    Abstract: We reinvestigate the question first posed by Glaeser, Laibson, Scheinkman and Soutter (2000, GLSS hereafter): What is the best measure of trust for predicting trusting behavior? This important study, cited over 2,100 times, established that the behavior in the investment game, an incentivized measure of trust, is not correlated with the responses to the most widely used survey questions about trust, employed in the General Social Survey (GSS) and the World Values Survey (WVS). We use the GLSS protocol with one major change: we employ the original Berg et al. (1995) investment game instead of the modified version used in GLSS. The standard game endows both players, while the latter endows only the first mover, potentially changing the incentives that influence subjects’ behavior. In particular, the utility from trusting behavior for inequality averse individuals may be higher, if the second movers are not endowed. Thus, such players may appear to be more trusting even though they are simply inequality averse. This causes a distortion in the laboratory measure of trust and reduces its correlation with the survey measure of trust. In support of this concern, GLSS demonstrates that the survey measure of trust is not correlated with trusting behavior in their investment game, where the second mover is not endowed. After endowing the second mover, we find the opposite. Our finding suggests that trust is a single construct, whether measured by the survey questions or by an incentivized game. This can be masked if the incentivized measure of trust is confounded with other motives.
    Keywords: Investment game, replication, lab experiment, trust, trustworthiness, inequality aversion
    JEL: C91 D64
    Date: 2017–01–19
  2. By: Leonardo Becchetti (DEF & CEIS University of Rome Tor Vergata); Maurizio Fiaschetti (SOAS University of London); Francesco Salustri (DEF University of Rome Tor Vergata)
    Abstract: We simulate in a randomised lab experiment the effect of Cash Mobs on consumers’ behaviour in an original variant of the multiplayer Prisoner’s dilemma called Vote-with-the-Wallet Game (VWG). The effect is modelled in a sequential game with/without an environmental frame in which a subset of players (cash-mobbers) is given the opportunity to reveal publicly (in aggregate without disclosing individual identities) their cooperation decision. We find that the treatment has a positive gross effect, that is, the share of cooperators is significantly higher in treated sessions and this is mainly due to the higher share of cooperators among cash-mobbers. Our results suggest that cash mobs-like mechanisms can help to solve social dilemmas with entirely private solutions (not based on punishment but on positive action) without costs for government budgets.
    Keywords: vote with the wallet, prisoner’s dilemma, randomised experiment
    JEL: C72 C73 C91 M14
    Date: 2017–04–18
  3. By: Tho Pham; Oleksandr Talavera
    Abstract: This paper examines the relationship between gender, social capital, and access to finance of micro, small, and medium enterprises in the manufacturing sector in Viet Nam. Our dataset is from the 2011, 2013, and 2015 waves of the Micro, Small, and Medium Enterprise Survey in Viet Nam. Using the Heckman technique to control for sample selection bias, the data do not provide evidence for discrimination against female-owned enterprises in the formal lending market. Specifically, female entrepreneurs have a higher probability of getting a loan and they pay lower interest rates in comparison with male entrepreneurs. No discrimination in formal credit markets may arise from the preference for informal loans over formal loans—that is, entrepreneurs tend to borrow informal loans before applying for formal ones. Further analysis shows that social capital could facilitate loan applications: firms that have a closer relationship with government officials and other business people can get loans of longer duration.
    Date: 2017
  4. By: Emma Howard
    Abstract: This paper uses panel data to assess the relative importance of social networks and geographic proximity to micro, small, and medium enterprises in Viet Nam. The results suggest that a larger social network, and hiring employees mainly through social networks, are both correlated with higher value added per worker. The number of government officials and civil servants in a firm’s network emerges as particularly important. When the quality of contacts is controlled for, firms with tighter social networks have, on average, higher value added per worker. The analysis of spatial networks reveals that firms with a lower percentage of customers and suppliers in the same district actually have higher value added per worker. The results suggest that for micro, small, and medium firms in Viet Nam, strong social networks are much more important than geographic proximity.
    Date: 2017
  5. By: Omar Shahabudin McDoom
    Abstract: How do changes in socioeconomic inequality between ethnic groups affect interethnic ties in a divided society? I analyse the evolution of cross-ethnic marriages in a society affected by violence along ethnic boundaries and make three principal findings. First, as inequality between ethnic groups increases, the prospects of interethnic marriages decline. Status equalization between ethnic groups promotes cross-ethnic ties. Insofar as intermarriage indicates social cohesion, reducing ethnic inequality in multiethnic societies may facilitate ethnic integration. Second, the effect of ethnic inequality is not uniform across ethnic groups. Endogamy remains high among certain groups even when socio-economic disparities diminish. I suggest this is because the ethnic norms and sanctions proscribing outmarriage are particularly powerful within these groups. Third, the social and political salience of ethnic boundaries may be distinct. Intermarriages can increase even as civil war violence intensifies. Ethnic divisions risk being overstated by assuming political attitudes also drive choices in the social sphere. I establish these findings in the deeply-divided society of Mindanao in the southern Philippines by analysing over 6.2 million marriages and comparing individual-level census data for the years 2000 and 2010. Mindanao is home to a longstanding insurgency, waged by rebels drawn from the native Muslim Moro population resentful of their minoritization and dispossession by Christian settlers.
    JEL: N0
    Date: 2017–04–08
  6. By: Omar Shahabudin McDoom
    Abstract: Although several theories of interethnic conflict emphasize ties across group boundaries as conducive to ethnic coexistence, little is known about how such ties are formed. Given their integrative potential, I examine the establishment of cross-ethnic marital ties in a deeply divided society and ask what drives individuals to defy powerful social norms and sanctions and to choose life-partners from across the divide. I theorize such choices as the outcome of a struggle between social forces and individual autonomy in society. I identify two channels through which social forces weaken and individual autonomy increases to allow ethnic group members to establish ties independently of group pressures: elite autonomy and status equalization. I find, first, that as an individual’s educational status increases, and second, as between-group inequality declines, individuals enjoy greater freedom in the choice of their social ties. However, I also find that in an ethnically ranked society this enhanced autonomy is exercised by members of high-ranked and low-ranked groups differently. Members from high-ranked groups become more likely to inmarry; low-ranked group members to outmarry. I suggest a status-optimization logic lies behind this divergent behaviour. Ethnic elites from high-ranked groups cannot improve their status through outmarriage and their coethnics, threatened by the rising status of the lower-ranked group, seek to maintain the distinctiveness of their status superiority through inmarriage. In contrast, as their own individual status or their group’s relative status improves, members of low-ranked groups take advantage of the opportunity to upmarry into the higher-ranked group. I establish these findings in the context of Mindanao, a conflict-affected society in the Philippines, using a combination of census micro-data on over two million marriages and in-depth interview data with inmarried and outmarried couples.
    Date: 2016
  7. By: Gao, Lin
    Abstract: This paper explores the evolution of interaction and cooperation supported by individuals’ changing trust and trustworthiness on directed weighted regular ring though agent-based modeling. This agent-based model integrates fragility of trust, interaction decision, strategy decision, payoff matrix decision, interaction density and information diffusion. Marginal rate of exploitation of original payoff matrix and relative exploitation degree between the original and mutated payoff matrices are stressed in trust updating; influence of observing is introduced via imagined strategy; relation is maintained through relation maintenance strength. The impact of degree of embeddedness in social network, mutation probability of payoff matrix, mutated payoff matrix, proportion of high trust agents and probabilities of information diffusion within neighborhood and among non-neighbors on the sum of number of actual interaction and cooperation of all agents are probed on the base of a baseline simulation, respectively. Under the experimental design and parameter values selection in this paper, it is found that basically as degree of embeddedness in social network, proportion of high trust agents and probability of information diffusion in neighbors increase, as mutation probability of payoff matrix, conflict in mutated payoff matrix and probability of information diffusion in non-neighbors decrease, interaction and cooperation perform better.
    Keywords: Trust, directed weighted regular ring, agent-based modeling, evolution of cooperation
    JEL: B52 C63 D82 D85
    Date: 2017–04–16
  8. By: Johannes C. Buggle
    Abstract: This paper explores the historical origins of collectivist cultural norms and their longterm economic consequences. In its first part, I test the hypothesis that collectivism emerged historically in pre-industrial agricultural economies in which group effort was crucial for subsistence. I find a positive and significant association between the traditional use of irrigation - a production mode that required extensive collaboration and coordination within groups of farmers - and collectivist norms today. Instrumenting traditional irrigation by the environmental suitability for irrigated agriculture lead to similar results that point at a causal interpretation of the findings. I find that the effects persist in migrants, and investigate factors that hinder the transmission of collectivism. The second part of the paper shows that by affecting culture, past irrigated agriculture continues to influence contemporaneous innovation at the national and individual level. While irrigated agriculture is associated with greater technological progress in pre-modern societies, this relationship is reversed in the long-run. In addition, by favoring attitudes towards obedience, past irrigation also predicts patterns of job specialization and selection into routine-intensive jobs of countries and individuals.
    Keywords: Agriculture; Culture, Collectivism, Persistence, Innovation, Job Tasks
    JEL: N00 O10 O30 Z10
    Date: 2017–04

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