nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒07‒23
fourteen papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Trust, Reciprocity and Rules By Rietz, Thomas; Schniter, Eric; Sheremeta, Roman; Shields, Timothy
  2. Measuring Social Connectedness By Bailey, Michael; Cao, Ruiqing; Kuchler, Theresa; Ströbel, Johannes; Wong, Arlene
  3. The Effect of Voluntary Participation on Cooperation By Daniele Nosenzo; Fabio Tufano
  4. Belief in Hard Work and Altruism: Evidence from a Randomized Field Experiment By Sule Alan; Seda Ertac
  5. Gender and bargaining: Experimental evidence from rural Uganda By Ben D’Exelle; Christine Gutekunst; Arno Riedl
  6. Favouritism Or Fairness?: A Framed Laboratory Experiment By Dey, Oindrila; Das, Abhishek; Gupta, Gautam; Banerjee, Swapnendu
  7. Trust and technology transfers By Maria Garcia-Vega; Elena Huergo
  8. Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya By Renate Strobl; Conny Wunsch
  9. Cooperation and Endogenous Repetition in an Infinitely Repeated Social Dilemma By Kenju Kamei
  10. Consequences of culture and diversity for governmental redistribution By Gründler, Klaus; Köllner, Sebastian
  11. The degree measure as utility function over positions in networks By René van den Brink; Agnieszka Rusinowska
  12. Payments data: do consumers want to keep them in a safe or turn them into gold? By Carin van der Cruijsen
  13. Culture, Diffusion, and Economic Development: The Problem of Observational Equivalence By Harutyunyan, Ani; Özak, Ömer
  14. Network Memory, Cultural Distance and the Ebb and Flow of International Resources –Evidence from 20 years of Professional Player Transfers to Big-five European Soccer Leagues By Mukherjee Subhasree; Dhayanithy Deepak

  1. By: Rietz, Thomas; Schniter, Eric; Sheremeta, Roman; Shields, Timothy
    Abstract: Many economic interactions rely on trust, which is sometimes violated. The fallout from business fraud and other malfeasance shows serious economic consequences of trust violations. Simple rules mandating minimum standards are attractive because they prevent the most egregious trust violations. However, such rules may undermine more trusting and reciprocal (trustworthy) behavior that otherwise would have occurred and, thus, lead to worse outcomes. We use an experimental trust game to test the efficacy of exogenously imposed minimum standard rules. Rules fail to increase trust and reciprocity, leading to lower economic welfare. Although sufficiently restrictive rules restore welfare, trust and reciprocity never return. The pattern of results is consistent with participants who are not only concerned with payoffs, but also use the game to learn about trust and trustworthiness of others.
    Keywords: Trust, Reciprocity, Minimum Standards, Experiment
    JEL: C72 C90 D63 D64 L51
    Date: 2017–07–19
  2. By: Bailey, Michael; Cao, Ruiqing; Kuchler, Theresa; Ströbel, Johannes; Wong, Arlene
    Abstract: We introduce a new measure of social connectedness between U.S. county-pairs, as well as between U.S. counties and foreign countries. Our measure, which we call the 'Social Connectedness Index' (SCI), is based on the number of friendship links on Facebook, the world's largest online social networking service. Within the U.S., social connectedness is strongly decreasing in geographic distance between counties: for the population of the average county, 62.8% of friends live within 100 miles. The populations of counties with more geographically dispersed social networks are generally richer, more educated, and have a higher life expectancy. Region-pairs that are more socially connected have higher trade flows, even after controlling for geographic distance and the similarity of regions along other economic and demographic measures. Higher social connectedness is also associated with more cross-county migration and patent citations. Social connectedness between U.S. counties and foreign countries is correlated with past migration patterns, with social connectedness decaying in the time since the primary migration wave from that country. Trade with foreign countries is also strongly related to social connectedness. These results suggest that the SCI captures an important role of social networks in facilitating both economic and social interactions. Our findings also highlight the potential for the SCI to mitigate the measurement challenges that pervade empirical research on the role of social interactions across the social sciences.
    Keywords: Diffusion of Information; homophily; Measurement; migration; Patent Citations; Social Networks; Trade
    JEL: D8 F1 J6 L14 O33 R23
    Date: 2017–07
  3. By: Daniele Nosenzo (School of Economics, University of Nottingham); Fabio Tufano (School of Economics, University of Nottingham)
    Abstract: We study the effects of voluntary participation on cooperation in collective action problems. Voluntary participation may foster cooperation through a mechanism of assortative selection of interaction partners based on false consensus bias, or through a mechanism whereby the decision to not participate can be used as a threat against free-riders. We examine the effectiveness of these mechanisms in a one-shot public goods experiment. Voluntary participation has a positive effect on provision only through the threat of non-participation. Assortative selection of interaction partners seems to play a minor role in our setting, whereas the threat of non-participation is a powerful force to discipline free-riding.
    Keywords: collective action; cooperation; voluntary participation; experiment
    Date: 2017–12
  4. By: Sule Alan (University of Essex); Seda Ertac (Koc University)
    Abstract: We show that optimistic beliefs regarding the role of effort in success, while leading to success, diminish the individual’s sympathy toward the unsuccessful. We generate random variation in the degree of optimism about the productivity of effort via an effective educational intervention. We find that treated children, holding significantly more optimistic beliefs, are no less likely than control to give to unlucky recipients, but significantly less likely to give to those who failed at a real effort task despite an opportunity to build skill. The results highlight possible unintended social effects of effort-focused optimism and have implications for political economy.
    Keywords: redistributive preferences, prosocial behavior, altruism, beliefs, fairness, field experiments
    JEL: D31 D64 I24 I28
    Date: 2017–07
  5. By: Ben D’Exelle; Christine Gutekunst; Arno Riedl
    Abstract: We study gender differences in bilateral bargaining using an artefactual field experiment in rural Uganda, through variation in gender composition of bargaining pairs and in disclosure of identities. Disagreement is common independently of disclosure condition, but less frequent among female-only pairs. When paired with a man who is informed about their identity, women tend to demand less than men in the same situation. The influence of beliefs on demands is stronger for men than for women, and this difference is larger under anonymity than when identities are disclosed. These results identify important mechanisms that induce gender inequality in resource access.
    Date: 2017
  6. By: Dey, Oindrila; Das, Abhishek; Gupta, Gautam; Banerjee, Swapnendu
    Abstract: This paper provides laboratory experimental evidence for prevalence of organizational favouritism. It is significantly found that when subjects where put into a situation where they can offer a job to someone then the choice criteria is based on social ties rather than efficiency. Interestingly, even when subjects had the choice of giving the job to her favourite person, she prefers to give it randomly to anyone from her favoured pool, when her group size is large. Also, socio-economic factors like family structure, family occupation, social connection, caste and political connections are among the important factors in explaining the emergence of favouritism.
    Keywords: Favouritism, group size, status, efficiency, lab experiment
    JEL: C91 C92 D03 J7 M51
    Date: 2017–07–15
  7. By: Maria Garcia-Vega; Elena Huergo
    Abstract: Research and development is largely done by multinationals (MNEs) that transfer technology to their foreign subsidiaries. Trust might be an important determinant of the governance of technology transfers because trust can reduce the dependence of the subsidiary on the headquarters. We empirically investigate how widely held perceptions of the trustworthiness of the host economy influence international technology transfers that subsidiaries receive from their business group or from other international providers. We use firm-level data on R&D imports from foreign subsidiaries operating in Spain for the period 2005 to 2012, and a Eurobarometer measure of trust between citizens of European countries. Our empirical strategy utilizes variation of trust in Spaniards of citizens from countries of different parent companies. We find that subsidiaries that belong to MNEs from countries with higher trust in Spaniards have fewer technology transfers within the business group and more from international market channels than subsidiaries from countries with lower trust in Spaniards. This result is consistent with the idea that a subsidiary from a country whose citizens trust Spaniards enjoys more autonomy to obtain foreign technologies. Our results support predictions of transaction cost economics about how technology transfers are organized.
    Keywords: Trust, technology transfers, R&D imports, heterogeneous firms JEL Codes: D23, L14, L24, O30
    Date: 2017
  8. By: Renate Strobl; Conny Wunsch (University of Basel)
    Abstract: In this study we experimentally investigate whether solidarity, which is a crucial base for informal insurance arrangements in developing countries, is sensitive to the extent to which individuals can influence their risk exposure. With slum dwellers of Nairobi our design measures subjects' willingness to share income with a worse-o ff partner both in a setting where participants could either deliberately choose or were randomly assigned to a safe or a risky project. We find that when risk exposure is a choice, willingness to give is roughly 9 percentage points lower compared to when it is exogenously assigned to subjects. The reduction of solidarity is driven by a change in giving behaviour of persons with the risky project. Compared to their counterparts in the random treatment, voluntary risk takers are seemingly less motivated to share their high payoff with their partner, especially if this person failed after choosing the risky project. This suggests that the willingness to show solidarity is influenced by both the desire for own compensation and attributions of responsibility. Our findings have important implications for policies that interact with existing informal insurance arrangements.
    Keywords: Solidarity; Risk taking; Kenya
    JEL: D81 C91 O12 D63
    Date: 2017
  9. By: Kenju Kamei (Durham Business School)
    Abstract: A large body of theoretical and experimental literature suggests that exogenously imposed infinite repetition can mitigate people’s opportunistic behavior in dilemma situations through personal enforcement. But, do people collectively choose to interact with the same persons, when there is an alternative with random matching? In a framework of an indefinitely-repeated collective action dilemma game, we let subjects collectively choose whether to (i) play with specific others for all rounds or to (ii) play with randomly matched counterparts in every period. The experiment showed that most subjects collectively select the partner matching option. It also indicated that groups achieve a higher level of cooperation when subjects collectively select option (i) by voting, compared with when the same option is exogenously imposed. These findings have an implication that people’s equilibrium selection may be affected by how the basic rules of games are introduced (endogenously or exogenously) to them.
    Keywords: experiment, public goods, cooperation, dilemma, social norms, endogenous choices
    JEL: C92 H41 C73 D72
    Date: 2017–07
  10. By: Gründler, Klaus; Köllner, Sebastian
    Abstract: We empirically study the effects of culture and diversity on government redistribution based on a large sample of countries. To disentangle culture from institutions, our analysis employs regional instruments as well as data on the prevalence of the pathogen Toxoplasma Gondii, linguistic differences, and the frequency of blood types. Redistribution is higher in countries with (1) loose family ties and individualistic attitudes, (2) high prevalence of trust and tolerance, (3) low acceptance of unequally distributed power and obedience, and (4) a prevalent belief that success is the result of luck and connections. Apart from their direct effects, these traits also exert indirect impact by influencing the transmission of inequality to redistribution. Finally, we show that redistribution and diversity in terms of culture, ethnic groups, and religion stand in a non-linear relationship, where moderate levels of diversity impede redistribution and higher levels offset the generally negative effect.
    Keywords: Culture,Redistribution,Diversity
    JEL: I38 Z1 D72 D31
    Date: 2017
  11. By: René van den Brink (Department of Econometrics and Tinbergen Institute, VU University); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: In this paper, we connect the social network theory on centrality measures to the economic theory of preferences and utility. Using the fact that networks form a special class of cooperative TU-games, we provide a foundation for the degree measure as a von Neumann-Morgenstern expected utility function reflecting preferences over being in different positions in different networks. The famous degree measure assigns to every position in a weighted network the sum of the weights of all links with its neighbours. A crucial property of a preference relation over network positions is neutrality to ordinary risk. If an expected utility function over network positions satisfies this property and some regularity properties, then it must be represented by a utility function that is a multiple of the degree centrality measure. We show this in three steps. First, we characterize the degree measure as a centrality measure for weighted networks using four natural axioms. Second, we relate these network centrality axioms to properties of preference relations over positions in networks. Third, we show that the expected utility function is equal to a multiple of the degree measure if and only if it represents a regular preference relation that is neutral to ordinary risk. Similarly, we characterize a class of affine combinations of the outdegree and indegree measure in weighted directed networks and deliver its interpretation as a von Neumann-Morgenstern expected utility function
    Keywords: Weigthed network; network centrality; utility function; degree centrality, von Neumann-Morgenstern expected utility function; coopeative TU-game; weighted directed network
    JEL: D81 D85 C02
    Date: 2017–07
  12. By: Carin van der Cruijsen
    Abstract: For policymakers seeking to protect consumer data or financial stability and financial institutions that wish to keep their customers satisfied it is key to know consumers' attitudes towards payments data usage. This paper provides detailed insight into these attitudes based on unique surveys held among Dutch consumers. Privacy is considered an important payment instrument attribute, especially by low-educated, low-income, and elderly consumers and consumers who have little trust in other people or in their bank. Attitudes towards payments data usage depend on the context. For example, most people support the use of payments data to improve security or services but find sharing payments data with other companies unacceptable. Moreover, the latter practice would result in a significant decline of trust in banks. Depending on the purpose of the data use, attitudes relate to socio-demographic factors, online behaviour, satisfaction with the bank and perceptions of current data usage practices. Lastly, many consumers are unwilling to share their payments data with non-banks to use a payment app or get a financial overview. This holds especially for consumers with low trust in other people and in banks
    Keywords: privacy; payments data; consumer attitudes; consumer survey; banks; trust
    JEL: D14 D12
    Date: 2017–07
  13. By: Harutyunyan, Ani; Özak, Ömer
    Abstract: This research explores the direct and barrier effects of culture on economic development. It shows both theoretically and empirically that whenever the technological frontier is at the top or bottom of the world distribution of a cultural value, there exists an observational equivalence between absolute cultural distances and cultural distances relative to the frontier, preventing the identification of its direct and barrier effects. Since the technological frontier usually has the ``right'' cultural values for development, it tends to be in the extremes of the distribution of cultural traits, generating observational equivalence and confounding the analysis. These results highlight the difficulty of disentangling the direct and barrier effects of culture. The empirical analysis finds suggestive evidence for direct effects of individualism and conformity with hierarchy, and barrier effects of hedonism.
    Keywords: Comparative economic development, cultural differences, barriers to technological diffusion, individualism, power distance, vertical hierarchy, hedonism, linguistic distance, genetic distance
    JEL: F14 F43 O1 O10 O20 O30 O33 O40 O57 Z0 Z10
    Date: 2016–07
  14. By: Mukherjee Subhasree (Indian Institute of Management Kozhikode); Dhayanithy Deepak (Indian Institute of Management Kozhikode)
    Abstract: Although the psychological and inter-personal dynamics of boundary spanners leading to ebb and flow of network exchanges as well as its deleterious effects on firm profitability has been established,little is known about how organizations could moderate this ebb and flow. We develop a network memory and international cultural distances based approach to solving this conundrum. We argue that organizations’ prior network properties of trust and status moderate ebb and flow of resources. This moderation fades when source and target organization's or target manager’s cultural distances are large. We find robust empirical support for our hypotheses and discuss implications for theory and practice.
    Keywords: Ebb and Flow, interorganizational networks, network memory, cultural distance, resources
    Date: 2017–05

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.