nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2017‒12‒18
fourteen papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Increasing trust in the bank to enhance savings: Experimental evidence from India By Rahul Mehrotra; Vincent Somville; Lore vandewalle
  2. One Mandarin benefits the whole clan: hometown favoritism in an authoritarian regime By Do, Quoc-Anh; Nguyen, Kieu-Trang; Tran, Anh N.
  3. Economic Origins of Cultural Norms: The Case of Animal Husbandry and Bastardy By Christoph Eder; Martin Halla
  4. Social Capital and the Status Externality By Itaya, Jun-ichi; Tsoukis, Chris
  5. You Are Not Alone: Experimental Evidence on Risk Taking When Social Comparisons Matter By Harald W. Lang
  6. Birthplace diversity, incomes inequality and education gradients in generalised trust: The relevance of cognitive skills in 29 countries By Francesca Borgonovi; Artur Pokropek
  7. Generalized Trust and Media Consumption in Democratic and Nondemocratic Societies By Olesya Volchenko; Anna Shirokanova
  8. Beliefs, Exams and Social Media: A Study of Girls and Boys in the UK By Marina Della Giusta; Sarah Jewell; Danica Vukadinovic Greetham
  9. Strategic Philanthropists: Who Are They and Do They Matter? By Vicky Barham; Rose Anne Devlin; Rebekah Owusu
  10. The Origins of Cultural Divergence: Evidence from a Developing Country By Ho, Hoang-Anh; Martinsson, Peter; Olsson, Ola
  11. Online Red Packets: A Large-scale Empirical Study of Gift Giving on WeChat By Yuan Yuan; Tracy Xiao Liu; Chenhao Tan; Jie Tang
  12. Collective Action in Games as in Life: Experimental Evidence from Canal Cleaning in Haiti By Abbie Turiansky
  13. Tweeting for Peace: Experimental Evidence from the 2016 Colombian Plebiscite By Jorge Gallego; Juan D. Martínez; Kevin Munger; Mateo Vásquez
  14. The Effect of Positive Mood on Cooperation in Repeated Interaction By Proto, Eugenio; Sgroi, Daniel; Nazneen, Mahnaz

  1. By: Rahul Mehrotra; Vincent Somville; Lore vandewalle
    Abstract: Recent evidence highlights the importance of trust in explaining bank account savings. According to economic theory, repeated interactions can play a crucial role in shaping trust. We designed the first field experiment that tests whether increased interactions between clients and bankers influence a client's trust in bankers. We promoted interactions by randomly (i) opening accounts for the unbanked and (ii) making weekly payments on their accounts. At the end of these interventions, we measured trust by playing trust games between clients on the one hand, and their own local banker as well as an anonymous other banker on the other hand. The only intervention that has a signicant impact on the number of interactions is opening a bank account. It also greatly increases trust in the anonymous banker, but not in their own banker. Next, we investigate the importance of trust for account savings. We find a strong positive correlation between the clients' trust in their own banker and savings in the account, but their trust in another banker does not correlate with savings. From the decomposition of trust in its different determinants, we learn that expected trustworthiness matters most in explaining savings, while there is a minor role for social preferences and no role for risk attitudes. We conclude that the personalized client-banker relationships are crucial, but not malleable. Strategies which can deal with the expected trustworthiness - such as providing access to an ATM, or to a denser network of local bankers - might promote bank account savings.
    Keywords: India finance trust savings banking experiment rct
    Date: 2016
  2. By: Do, Quoc-Anh; Nguyen, Kieu-Trang; Tran, Anh N.
    Abstract: We study patronage politics in authoritarian Vietnam, using an exhaustive panel of ranking officials from 2000 to 2010 to estimate their promotions’ impact on infrastructure in their hometowns of patrilineal ancestry. Native officials’ promotions lead to a broad range of hometown infrastructure improvement. Hometown favoritism is pervasive across all ranks, even among officials without budget authority, except among elected legislators. Favors are narrowly targeted toward small communes that have no political power, and are strengthened with bad local governance and strong local family values. The evidence suggests a likely motive of social preferences for hometown.
    JEL: J1 N0
    Date: 2017
  3. By: Christoph Eder; Martin Halla
    Abstract: This paper explores the historical origins of the cultural norm regarding illegitimacy (formerly known as bastardy). We test the hypothesis that traditional agricultural production structures influenced the historical illegitimacy ratio, and have had a lasting effect until today. Based on data from the Austro-Hungarian Empire and modern Austria, we show that regions that focused on animal husbandry (as compared to crop farming) had significantly higher illegitimacy ratios in the past, and female descendants of these societies are still more likely to approve illegitimacy and give birth outside of marriage today. To establish causality, we exploit, within an IV approach, variation in the local agricultural suitability, which determined the historical dominance of animal husbandry. Since differences in the agricultural production structure are completely obsolete in today’s economy, we suggest interpreting the persistence in revealed and stated preferences as a cultural norm. Complementary evidence from an ‘epidemiological approach’ suggests that this norm is passed down through generations, and the family is the most important transmission channel. Our findings point to a more general phenomenon that cultural norms can be shaped by economic conditions, and may persist, even if economic conditions become irrelevant.
    Keywords: Cultural norms, persistence, animal husbandry, illegitimacy.
    JEL: Z1 A13 J12 J13 J43 N33
    Date: 2017–12
  4. By: Itaya, Jun-ichi; Tsoukis, Chris
    Abstract: This paper investigates how the presence of social capital affects the externality arising from status-seeking preference as a parable for inefficient antagonistic behavior. It is assumed that the stock of social capital is accumulating through joint social interaction between rational individuals who are forward looking. Using a differential game, we show that although the presence of social capital mitigates the tendency of overconsumption over time, social capital ends up declining to zero. It is also shown that the benefits from social capital enhance the motivation of individuals to accumulate social capital thereby leading to deter overaccumulation and thus possibly improving social welfare.
    Keywords: social capital, status externality, Markov perfect equilibrium, differential game,
    Date: 2017–12–07
  5. By: Harald W. Lang
    Abstract: We provide experimental evidence that social comparisons affect individual risk taking. In particular, we focus on the case when individuals care about their income-rank. Our model predicts that compared to standard expected utility theory income-rank comparisons lead to less (more) risk taking in case of lotteries with more probability mass on the downside (upside) of the distribution. Evidence shows in line with our predictions that individuals take less risk when lotteries have more probability weight on the downside. However, we do not find an effect for lotteries with more upside probability mass. The effect of social comparisons on risk taking is strongest when the deciding subject and the reference subject are of the same gender.
    Keywords: Social comparisons, individual risk taking, status, portfolio choice, relative income concerns, experiment
    JEL: C91 D03 D81 G11
    Date: 2016–11
  6. By: Francesca Borgonovi (OECD); Artur Pokropek (Joint Research Centre - European Commission)
    Abstract: The paper examines between-country differences in the mechanisms through which education could promote generalised trust using data from 29 countries participating in the OECD’s Survey of Adult Skills (PIAAC). Results indicate that education is strongly associated with generalised trust and that a large part of this association is mediated by individuals’ literacy skills, income and occupational prestige. However, education gradients in levels of generalised trust and in the extent to which they are due to social stratification mechanisms or cognitive skills mechanisms vary across countries. Differences across countries in birthplace diversity and income inequality are correlated with how strongly education is associated with trust in different countries, as well as in the relative magnitude of direct and indirect associations. In particular, the relationship between literacy skills and generalised trust is stronger in the presence of greater birthplace diversity but is weaker in the presence of greater income inequality.
    Date: 2017–12–15
  7. By: Olesya Volchenko (National Research University Higher School of Economics); Anna Shirokanova (National Research University Higher School of Economics)
    Abstract: Generalized trust is an information- and risk-based resource enabling communication in modern society. Mass media channels can reduce or increase generalized trust, but their effects are dependent on the social context. The purpose of this paper is to examine how different types of media consumption are related to generalized social trust under democratic and nondemocratic regimes. In modern societies generalized trust and mass media serve as mechanisms to overcome information-based uncertainty. We propose and investigate hypotheses on how the relation between news media consumption and social trust differs in democratic and nondemocratic societies. Using multilevel regression modelling on the nationally representative World Values Survey data from more than 75,000 people in 53 countries across the world (2011-2014) and international democracy indices, we look into the interactive effects of regular use of the Internet and television news and generalized trust in democratic and nondemocratic countries. The results show that, irrelevant of the political regime, regular news consumption from television is associated with lower trust to strangers. However, using Internet news in nondemocratic countries is linked with an additional decrease in trust to strangers. We discuss how these findings run against the argument of the bridging effect of the Internet in nondemocratic countries and support the mean-world hypothesis irrelevant of the political regime
    Keywords: generalized trust, social trust, media consumption, news, Internet, television, political regime, multilevel modelling, the DD index, Freedom House status.
    JEL: Z13
    Date: 2017
  8. By: Marina Della Giusta (Department of Economics, University of Reading); Sarah Jewell (Department of Economics, University of Reading); Danica Vukadinovic Greetham (Centre for the Mathematics of Human Behaviour, University of reading)
    Abstract: Social media diffusion amongst tween and teenagers keeps increasing year on year and involving younger and younger children and studies have begun to appear indicating several changes in adolescent behaviour and mental health corresponding with increased social media use (Twenge, 2017; Twenge et al., 2017). Data derived from social media is also increasingly used to predict a variety of outcomes including personality (Youyou at al., 2014) and mental health (De Choudhury et al., 2013). We investigate the determinants of social media use and the connection between social media and teenagers’ beliefs about education, which are known to be strongly connected to educational outcomes. We construct a representative sample of UK teenagers from British survey data and a sample of Twitter data specifically collected around the first national secondary school exam taken at age 16, which have important effects for further educational choices. Building on literature addressing the factors influencing teen’s educational expectations (Anders and Micklewright, 2015) and the construction of beliefs (Gennaioli and Schleifer, 2010; Corazzini et al, 2010; Oxoby, 2014; Coffman, 2014; Alesina et al, 2015; Bordalo et al, 2016a; Bordalo et al. 2016b), we model social media use in the representative sample. We identify significant associations between differential usage (at both the extensive and intensive margin) and controls (socio-demographics, parental inputs and children cognitive and non-cognitive skills), particularly indicating that intensive social media usage is indeed associated with a range of negative factors as found in research on US teens (Twenge, 2017). We also find that beliefs become more gender stereotypical with age, and more so the more tweens and teens are in social media. We then use social network modelling to investigate dynamics in the Twitter sample, and identify significant gender differences in social media communication patterns and moods pertaining to scientific subjects, which indicate social media contribute to educational beliefs, potentially biasing them through the propagation of gender stereotypes.
    Keywords: beliefs, social media, education, gender, social networks
    JEL: D03 D83 D84 D85 J16 J24
    Date: 2017–11–06
  9. By: Vicky Barham (University of Ottawa, ON, Canada); Rose Anne Devlin (University of Ottawa, ON, Canada); Rebekah Owusu (University of Ottawa, ON, Canada)
    Abstract: Anecdotal evidence suggests that charitable givers – particularly those with the financial means and inclination to make substantial donations – are increasingly strategic in their philanthropic behavior. This study is the first econometric investigation of individual strategic giving, that is giving which is planned, concentrated, and where the donor is also involved as a volunteer. Approximately 3% of the total giver population gives strategically in Canada. We find that the propensity to give strategically is strongly and positively correlated with the level of education and youth experiences, and that strategic givers are substantially more generous than non-strategic givers, particularly after controlling for endogeneity. Strategic giving has a large positive impact on the amount donated to secular organisations, but has no effect whatsoever on the level of religious giving, supporting the view that religious gifts should be modelled differently from non-religious gifts.
    Keywords: Strategic giving; philanthropy; charitable donations.
    Date: 2017
  10. By: Ho, Hoang-Anh (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Cultural norms diverge substantially across societies, often even within the same country. In the present paper, we study the voluntary settlement hypothesis, proposing that individualistic people tend to self-select into migrating out of reach from collectivist states towards the periphery and that such patterns of historical migration are reflected even in the contemporary distribution of norms. During most of the first millennium CE, the modern north of Vietnam was under an exogenously imposed Chinese rule. From the eleventh to the eighteenth centuries, historical Vietnam gradually expanded its territory to the Mekong River Delta through various waves of conquest and migration. In contrast to some recent research, we find very little support from historical sources for any major discontinuities in this territorial expansion. Combining archives with household survey and lab-in-the-field experiment, we demon- strate that areas being annexed earlier into historical Vietnam are nowadays more (less) prone to collectivist (individualist) culture. We argue that the southward out-migration of individualistic people was the main mechanism behind this finding, which is also in line with many historical accounts.
    Keywords: Culture; Individualism-Collectivism; Voluntary Settlement
    JEL: N45 O53 Z13
    Date: 2017–12
  11. By: Yuan Yuan; Tracy Xiao Liu; Chenhao Tan; Jie Tang
    Abstract: Gift giving is a ubiquitous social phenomenon, and red packets have been used as monetary gifts in Asian countries for thousands of years. In recent years, online red packets have become widespread in China through the WeChat platform. Exploiting a unique dataset consisting of 61 million group red packets and seven million users, we conduct a large-scale, data-driven study to understand the spread of red packets and the effect of red packets on group activity. We find that the cash flows between provinces are largely consistent with provincial GDP rankings, e.g., red packets are sent from users in the south to those in the north. By distinguishing spontaneous from reciprocal red packets, we reveal the behavioral patterns in sending red packets: males, seniors, and people with more in-group friends are more inclined to spontaneously send red packets, while red packets from females, youths, and people with less in-group friends are more reciprocal. Furthermore, we use propensity score matching to study the external effects of red packets on group dynamics. We show that red packets increase group participation and strengthen in-group relationships, which partly explain the benefits and motivations for sending red packets.
    Date: 2017–12
  12. By: Abbie Turiansky
    Abstract: This paper explores the impact of farmers’ exposure to a collective action dilemma in a framed public goods game on their real-world contributions to a public good. Farmers who were randomly selected to play the public goods games were 47% more likely than the control group to volunteer to clean shared irrigation canals.
    Keywords: Haiti, public goods, framed field experiments, behavioral economic nudges
    JEL: F Z
  13. By: Jorge Gallego; Juan D. Martínez; Kevin Munger; Mateo Vásquez
    Abstract: The decades-long Colombian civil war nearly came to an official end with the 2016 Peace Plebiscite, which was ultimately defeated in a narrow vote. This conflict has deeply divided Colombian civil society, and non-political public figures have played a crucial role in structuring debate on the topic. To understand the mechanisms underlying the influence of members of civil society on political discussion, we performed a randomized experiment on Colombian Twitter users shortly before this election. Sampling from a pool of subjects who had been frequently tweeting about the Plebiscite, we tweeted messages that encouraged subjects to consider different aspects of the decision. We varied the identity (a general, a scientist, and a priest) of the accounts we used and the content of the messages we sent. We found little evidence that any of our interventions were successful in persuading subjects to change their attitudes. However, we show that our pro-Peace messages encouraged liberal Colombians to engage in significantly more public deliberation on the subject.
    Date: 2017–11–30
  14. By: Proto, Eugenio (University of Warwick, CAGE and IZA); Sgroi, Daniel (University of Warwick, CAGE and Nuffield College, University of Oxford); Nazneen, Mahnaz (University of Warwick)
    Abstract: Existing research supports two opposing mechanisms through which positive mood might affect cooperation. Some studies have suggested that positive mood produces more altruistic, open and helpful behavior, fostering cooperation. However, there is contrasting research supporting the idea that positive mood produces more assertiveness and inward-orientation and reduced use of information, hampering cooperation. We find evidence that suggests the second hypothesis dominates when playing the repeated Prisoner’s Dilemma. Players in an induced positive mood tend to cooperate less than players in a neutral mood setting. This holds regardless of uncertainty surrounding the number of repetitions or whether pre-play communication has taken place. This finding is consistent with a text analysis of the pre-play communication between players indicating that subjects in a more positive mood use more inward-oriented, more negative and less positive language. To the best of our knowledge we are the first to use text analysis in pre-play communication.
    Keywords: JEL Classification:
    Date: 2017

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