nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒07‒16
eleven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Social trust, workplace organization, and the comparative advantage of nations By van Hoorn, Andre
  2. Tragedy of the Commons and Evolutionary Games in Social Networks: The Economics of Social Punishment By Jorge Marco; Renan Goetz
  3. Disentangling trust from risk-taking: Triadic approach By Sonsino, Doron; Shifrin, Max; Lahav, Eyal
  4. The Causal Impact of Social Connections on Firms' Outcomes By Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar
  5. Social capital and conflict: impact and implications By Aghajanian, Alia Jane
  6. On the social inappropriateness of discrimination By Abigail Barr; Tom Lane; Daniele Nosenzo
  7. Explaining Central Bank Trust in an Inflation Targeting Country: The Case of the Reserve Bank of New Zealand By Bernd Hayo; Florian Neumeier
  8. Spillovers, Persistence and Learning: Institutions and the Dynamics of Cooperation By Galbiati, Roberto; Henry, Emeric; Jacquemet, Nicolas
  9. Volunteering under Population Uncertainty By Adrian Hillenbrand; Fabian Winter
  10. Warm-Glow Giving in Networks with Multiple Public Goods By Lionel Richefort
  11. Caregivers in the Family: Daughters, Sons and Social Norms By Barigozzi, Francesca; Cremer, Helmuth; Roeder, Kerstin

  1. By: van Hoorn, Andre
    Abstract: In this paper, I consider a specific channel through which trust between parties to an exchange can go on to affect nations’ comparative advantage in certain industries. My approach revolves around the autonomy that employers (principals) grant to workers (agents), which is a key feature of workplace organization. I hypothesize that social trust generates a comparative advantage in industries with more autonomous micro production environments. I employ individual-level data on work autonomy to construct a measure of the extent to which industries are characterized by autonomy in the production process. Results of a cross-country cross-industry analysis confirm that countries with higher levels of social trust have a comparative advantage in high-autonomy industries and vice versa. Results are robust to the possibility of reverse causality. The paper’s key contribution is to provide a link between the microeconomic literature on workplace organization and the comparative macroeconomic literature on social trust.
    Keywords: Social capital; work autonomy; comparative economic development; division of labor; comparative advantage; organizational design; culture
    JEL: D23 L23 M54 O43 O57 P50 Z10
    Date: 2017
  2. By: Jorge Marco (University of Girona); Renan Goetz (University of Girona)
    Abstract: This study revisits the problem of the tragedy of the commons. Extracting agents participate in an evolutionary game in a complex social network and are subject to social pressure if they do not comply with the social norms. Social pressure depends on the dynamics of the resource, the network and the population of compliers. We analyze the influence the network structure has on the agents’ behavior and determine the economic value of the intangible good - social pressure. For a socially optimal management of the resource, an initially high share of compliers is necessary but is not sufficient. The analysis shows the extent to which the remaining level of the resource, the share of compliers and the size, density and local cohesiveness of the network contribute to overcoming the tragedy of the commons. The study suggests that the origin of the problem – shortsighted behavior - is also the starting point for a solution in the form of a one-time payment. A numerical analysis of a social network comprising 7500 agents and a realistic topological structure is performed using empirical data from the western La Mancha aquifer in Spain.
    Keywords: Tragedy of the Commons, Cooperation, Evolutionary Game, Social Network, Social Punishment
    JEL: C71 D85 Q25
    Date: 2017–07
  3. By: Sonsino, Doron; Shifrin, Max; Lahav, Eyal
    Abstract: The willingness to trust human receivers is compared to the inclination to take lottery risk in six distinct scenarios, controlling the return distributions. Trust shows significantly smaller responsiveness to return expectations compared to parallel pure-risk lottery allocation, and paired comparisons reveal that investors sacrifice 5% of the expected payoff to trust anonymous receivers. Trust is more calculated and volatile for males, while appearing relative stable for females. The results complement the accumulating evidence regarding physiological differences between trust and risk, in addition suggesting that the trust-risk gap is larger for females.
    Keywords: Trust, risk, gender, ambiguity, betrayal aversion
    JEL: C72 C90 D80
    Date: 2016–04
  4. By: Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar
    Abstract: The paper studies how social connections affect firm-level hiring decisions and performance. We use register data to characterize the social connections of firms' employees. For causal identification, we use displacements which create directed supply shocks towards the firms of the displaced workers' social connections. We make sure that our results are fully driven by these directed supply shocks. Results show that firms appear to prefer employed workers they are connected to over unconnected or unemployed workers when hiring. The employed and connected mostly go to high-productivity firms whereas the unemployed and unconnected tend to go to low-productivity firms. Strong connections - family, recent, durable, formed in small groups, between socially similar agents - matter the most. Displacements shocks cause connected firms, in particular low-productivity ones, to hire those workers they are connected to. Unconnected hires and separations are essentially unaffected. These supply shocks therefore cause the creation of additional jobs which increase firms' employment. In addition, we use these shocks to show that hiring connected workers has a positive causal impact on firm performance. These results are consistent with a stylized framework where connections reduce hiring frictions and where the firm-level possibility to hire connected workers is a function of changing outside options of these workers.
    Keywords: job creation; Job Displacement; job search; networks
    JEL: J23 J30 J60
    Date: 2017–07
  5. By: Aghajanian, Alia Jane
    Abstract: This thesis explores the relationship between social capital and conflict in two different contexts, by answering the following two questions: How does exposure to violence affect social capital in urban Maharashtra, India? How does returning home affect social capital amongst internally displaced persons and returnees from Nahr el Bared camp in North Lebanon? This thesis then goes on to look at the labour market implications of returning home to Nahr el Bared camp, exploring the role of social capital (amongst other mechanisms) in this relationship. The following paragraphs are abstracts from the three empirical chapters that address these questions. The first empirical chapter explores the relationship between exposure to riots and social capital in urban Maharashtra. We exploit a panel dataset collected by the authors and apply a random effects model with lagged covariates to estimate an exogenous relationship between neighbourhood exposure to riots and four forms of social capital: membership in a group or organisation, trust in neighbours, participation in community discussions and participation in community festival preparations. Consistent with Bellows and Miguel's study of conflict and social capital (2009), we find that households living in neighbourhoods that experienced a riot are more likely to be members of groups and organisations. On the other hand, we find that these households are less likely to join community discussions, which lends more to the hypothesis of fragmented post-conflict societies with a damaged social fabric (Colletta and Cullen, 2000). We explore various mechanisms behind these results and find that the increased membership in organisations is greatest in diverse neighbourhoods that have not experienced recent changes in composition. However, riots reduce trust and the likelihood of participation in fragmented and polarised riot-affected neighbourhoods. Riots also decrease participation in festival preparations in neighbourhoods where out-migration has been low. Our analysis suggests that individuals and households instrumentally use social capital to their advantage, a type of insurance to protect against potential communal violence in the future. However, riots can have adverse affects on different forms of social capital that go beyond the surface level of social networking to feelings of trust and sense of community. The second empirical chapter studies the effect of returning home after conflict induced displacement on social capital, compared to remaining displaced. I have collected a household survey of displaced Palestinians from a refugee camp in Lebanon, and this chapter assesses the impact of return on the different dimensions of social capital based on a diverse and rich set of questions. An instrumental variable is used to model the return decision in one part of the camp, and the exogenous nature of return is exploited in another section of the camp. Results show that return can improve social capital if households return within one year of the war ending and with their friends and family. If households have been displaced for too long, then social capital is decreased upon returning home. This indicates that social capital is not simply carried over from displacement to return, but is rebuilt in a process that takes time and effort. The third and final empirical chapter studies the effect of returning home on labour market outcomes. Theoretically the effect of return is ambiguous, depending on changes in both the demand and supply of labour. I empirically study the effect of return on four labour market outcomes: participation in the labour force, working, wages and number of days worked. I analyse a dataset of individuals originally from Nahr el-Bared camp in North Lebanon, displaced within Lebanon after a war in 2007 between the Lebanese army and Fatah al-Islam. I use an instrumental variable and exploit the exogenous nature of the return process in order to estimate a causal effect of return. The results show that return increases the likelihood of working by 117 percentage points. This effect is greatest for those who have returned within two years, reaping the benefits of greater aggregate demand as the market increases. Women returnees are more likely to be working compared to the displaced, but there is no difference in employment between men who have been displaced and those who have returned. This could be because women possess skills that are adaptable in labour markets, working in cottage type industries from home, as opposed to the more specialised skills that men tend to possess.
    Date: 2016–12
  6. By: Abigail Barr (School of Economics, University of Nottingham); Tom Lane (Nottingham University Business School, Ningbo, China); Daniele Nosenzo (School of Economics, University of Nottingham)
    Abstract: We experimentally investigate the relationship between discriminatory behaviour and the perceived social inappropriateness of discrimination. We test the framework of Akerlof and Kranton (2000, 2005), which suggests discrimination will be stronger when social norms favour it. Our results support this prediction. Using a Krupka-Weber social norm elicitation task, we find participants perceive it to be less socially inappropriate to discriminate on the basis of social identities artificially induced, using a trivial minimal group technique, than on the basis of nationality. Correspondingly, we find that participants discriminate more in the artificial identity setting. Our results suggest norms and the preference to comply with them affect discriminatory decisions and that the social inappropriateness of discrimination moderates discriminatory behaviour.
    Keywords: Discrimination; Social norms; Krupka-Weber method; Allocator game
    Date: 2017–11
  7. By: Bernd Hayo (University of Marburg); Florian Neumeier (Ifo Institute–Leibniz Institute for Economic Research at the University of Munich)
    Abstract: Employing data from a representative population survey conducted in New Zealand in 2016, this paper examines factors that influence, or are at least associated with, public trust in the Reserve Bank of New Zealand (RBNZ). The large number of specifically designed questions allows studying the relationship between six dimensions and RBNZ trust: (i) economic situation, (ii) monetary policy knowledge, (iii) nonspecific trust, (iv) interest and information search, (v) politicians and government, and (vi) socio-demographic indicators. Using ordered logit models, we find that at least one indicator from each of these six dimensions has a statistically significant conditional correlation with individuals’ trust in RBNZ. Satisfaction with own financial situation, objective knowledge about the RBNZ’s main policy objective, responsibility for interest rate setting, subjective knowledge about inflation, trust in government institutions, desire to be informed about RBNZ, age, and full-time selfemployment have a positive relationship with RBNZ trust. The reverse is found for respondents who do not keep up with RBNZ and believe that politicians are long-term oriented. In terms of economic relevance, institutional trust has the largest single impact on RBNZ trust and the subjective and objective knowledge indicators show a strong combined influence.
    Keywords: Central Bank Trust, Survey, Public Attitudes, Reserve Bank of New Zealand, Monetary Policy
    JEL: E52 E58 Z1
    Date: 2017
  8. By: Galbiati, Roberto; Henry, Emeric; Jacquemet, Nicolas
    Abstract: We study how cooperation-enforcing institutions dynamically affect values and behavior using a lab experiment designed to create individual specific histories of past institutional exposure. We show that the effect of past institutions is mostly due to "indirect" behavioral spillovers: facing penalties in the past increases partners' cooperation in the past, which in turn positively affects ones' own current behavior. We demonstrate that such indirect spillovers induce persistent effects of institutions. However, for interactions that occur early on, we find a negative effect of past enforcement due to differential learning under different enforcement institutions.
    Keywords: Cooperation; experiments.; Laws; learning; persistence of institutions; repeated games; social values; Spillovers
    JEL: C73 C91 D02 K49 P16 Z1
    Date: 2017–07
  9. By: Adrian Hillenbrand (Max Planck Institute for Research on Collective Goods); Fabian Winter (Max Planck Institute for Research on Collective Goods)
    Abstract: There is ample evidence that the number of players can have an important impact on the cooperation and coordination behavior of people facing social dilemmas. With extremely few exceptions, the literature on cooperation assumes common knowledge about who is a player and how many players are involved in a certain situation. In this paper, we argue that this assumption is overly restrictive, and not even very common in real-world cooperation problems. We show theoretically and experimentally that uncertainty about the number of players in a Volunteer's Dilemma increases cooperation compared to a situation with a certain number of players. We identify additional behavioral mechanisms amplifying and impairing the effect.
    Date: 2017–07
  10. By: Lionel Richefort (Université de Nantes, LEMNA)
    Abstract: This paper explores a voluntary contribution game in the presence of warm-glow effects. There are many public goods and each public good benefits a different group of players. The structure of the game induces a bipartite network structure, where players are listed on one side and the public good groups they form are listed on the other side. The main result of the paper shows the existence and uniqueness of a Nash equilibrium. The unique Nash equilibrium is also shown to be locally asymptotically stable. Then the paper provides some comparative statics analysis regarding pure redistribution, taxation and subsidies. It appears that small redistributions of wealth may sometimes be neutral, but generally, the effects of redistributive policies depend on how public good groups are related in the contribution network structure.
    Keywords: Multiple Public Goods, Warm-glow Effects, Bipartite Contribution Structure, Nash Equilibrium, Comparative Statics
    JEL: C72 D64 H40
    Date: 2017–07
  11. By: Barigozzi, Francesca (University of Bologna); Cremer, Helmuth (Toulouse School of Economics); Roeder, Kerstin (University of Augsburg)
    Abstract: Daughters are the principal caregivers of their dependent parents. In this paper, we study long-term care (LTC) choices by bargaining families with mixed- or same-gender siblings. LTC care can be provided either informally by children, or formally at home or in an institution. A social norm implies that daughters suffer a psychological cost when they provide less informal care than the average child. We show that the laissez-faire (LF) and the utilitarian first-best (FB) differ for two reasons. First, because informal care imposes a negative externality on daughters via the social norm, too much informal care is provided in LF. Second, the weights children and parents have in the family bargaining problem might differ in general from their weights in social welfare. We show that the FB allocation can be achieved through a system of subsidies on formal home and institutional care. Except when children and parents have equal bargaining weights these subsidies are gender-specific and reflect Pigouvian as well as "paternalistic" considerations.
    Keywords: social norms, formal and informal LTC, daughters, sons
    JEL: D13 H23 H31 I19
    Date: 2017–06

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