nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2018‒11‒05
twelve papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. The causal effect of trust By Björn Bartling; Ernst Fehr; David Huffman; Nick Netzer
  2. Connecting to Power: Political Connections, Innovation, and Firm Dynamics By Ufuk Akcigit; Salomé Baslandze; Francesca Lotti
  3. Religion, division of labor and conflict: Anti-semitism in Germany over 600 years By Sascha O. Becker; Luigi Pascali
  4. Social capital at venture capital firms and their financial performance: Evidence from China By Qi-lin Cao; Hua-yun Xiang; You-jia Mao; Ben-zhang Yang
  5. Knowing Me, Knowing You? Similarity to the CEO and Fund Managers' Investment Decisions By Jaspersen, Stefan; Limbach, Peter
  6. Prosociality, Political Identity, and Redistribution of Earned Income: Theory and Evidence. By Sanjit Dhami; Emma Manifold; Ali al-Nowaihi
  7. Reasons for unmet needs for health care: the role of social capital and social support in some Western EU countries By Fiorillo, D.;
  8. Where to look for the morals in markets? By Matthias Sutter; Juergen Huber; Michael Kirchler; Matthias Stefan; Markus Walzl
  9. Ctrl+C Ctrl+pay: Do people mirror payment behaviour of their peers? By Carin van der Cruijsen; Joris Knoben
  10. Gender Norms and Intimate Partner Violence By Libertad González; Núria Rodríguez-Planas
  11. Social Image or Social Norm?: Re-examining the Audience Effect in Dictator Game Experiments By Chulyoung Kim; Sang-Hyun Kim
  12. Trust in Leadership and Affective Commitment as a Mediator between Servant Leadership Behavior and Extra-Role Behavior of Teachers By Titik Rosnani

  1. By: Björn Bartling; Ernst Fehr; David Huffman; Nick Netzer
    Abstract: Trust affects almost all human relationships – in families, organizations, markets and politics. However, identifying the conditions under which trust, defined as people's beliefs in the trustworthiness of others, has a causal effect on the efficiency of human interactions has proven to be difficult. We show experimentally and theoretically that trust indeed has a causal effect. The duration of the effect depends, however, on whether initial trust variations are supported by multiple equilibria. We study a repeated principal-agent game with multiple equilibria and document empirically that an efficient equilibrium is selected if principals believe that agents are trustworthy, while players coordinate on an inefficient equilibrium if principals believe that agents are untrustworthy. Yet, if we change the institutional environment such that there is a unique equilibrium, initial variations in trust have short-run effects only. Moreover, if we weaken contract enforcement in the latter environment, exogenous variations in trust do not even have a short-run effect. The institutional environment thus appears to be key for whether trust has causal effects and whether the effects are transient or persistent.
    Keywords: Trust, causality, equilibrium selection, belief distortions, incomplete contracts, screening, institutions
    JEL: C91 D02 D91 E02
    Date: 2018–10
  2. By: Ufuk Akcigit; Salomé Baslandze; Francesca Lotti
    Abstract: Do political connections affect firm dynamics, innovation, and creative destruction? We study Italian firms and their workers to answer this question. Our analysis uses a brand-new dataset, spanning the period from 1993 to 2014, where we merge: (i) firm-level balance sheet data; (ii) social security data on the universe of workers; (iii) patent data from the European Patent Office; (iv) the national registry of local politicians; and (v) detailed data on local elections in Italy. We find that firm-level political connections are widespread, especially among large firms, and that industries with a larger share of politically connected firms feature worse firm dynamics. We identify a leadership paradox: When compared to their competitors, market leaders are much more likely to be politically connected, but much less likely to innovate. In addition, political connections relate to a higher rate of survival, as well as growth in employment and revenue, but not in productivity – a result that we also confirm using a regression discontinuity design. We build a firm dynamics model, where we allow firms to invest in innovation and/or political connection to advance their productivity and to overcome certain market frictions. Our model highlights a new interaction between static gains and dynamic losses from rent-seeking in aggregate productivity.
    JEL: D70 O3 O4
    Date: 2018–10
  3. By: Sascha O. Becker; Luigi Pascali
    Abstract: We study the role of economic incentives in shaping the co-existence of Jews, Catholics and Protestants, using novel data from Germany for 1,000+ cities. The Catholic usury ban and higher literacy rates gave Jews a specific advantage in the moneylending sector. Following the Protestant Reformation (1517), the Jews lost these advantages in regions that became Protestant. We show 1) a change in the geography of anti-Semitism with persecutions of Jews and anti-Jewish publications becoming more common in Protestant areas relative to Catholic areas; 2) a more pronounced change in cities where Jews had already established themselves as moneylenders. These findings are consistent with the interpretation that, following the Protestant Reformation, Jews living in Protestant regions were exposed to competition with the Christian majority, especially in moneylending, leading to an increase in anti-Semitism.
    Keywords: Anti-semitism, religion, conflict, division of labor
    JEL: Z12 O18 N33 N93 D73
    Date: 2018–10
  4. By: Qi-lin Cao; Hua-yun Xiang; You-jia Mao; Ben-zhang Yang
    Abstract: This paper studies the extent to which social capital drives performance in the Chinese venture capital market and explores the trend toward VC syndication in China. First, we propose a hybrid model based on syndicated social networks and the latent-variable model, which describes the social capital at venture capital firms and builds relationships between social capital and performance at VC firms. Then, we build three hypotheses about the relationships and test the hypotheses using our proposed model. Some numerical simulations are given to support the test results. Finally, we show that the correlations between social capital and financial performance at venture capital firms are weak in China and find that China's venture capital firms lack mature social capital links.
    Date: 2018–10
  5. By: Jaspersen, Stefan; Limbach, Peter
    Abstract: This study provides evidence that investors’ demographic similarity to CEOs affects their investment decisions. We find that mutual fund managers overweight firms led by CEOs who resemble them in terms of age, ethnicity and gender. This finding is robust to excluding educational and local ties and is supported by variation in similarity caused by CEO departures. Investing in firms run by similar CEOs, on average, is associated with superior performance and is more pronounced when CEOs have more impact on their firms. Results suggest that demographic similarity to CEOs facilitates informed trading, implying that investors’ information production incorporates firm management.
    Keywords: CEO-investor similarity,familiarity bias,information advantages,investment decisions,mutual fund performance
    JEL: G11 G23 J10
    Date: 2018
  6. By: Sanjit Dhami; Emma Manifold; Ali al-Nowaihi
    Abstract: We explore the relation between social political identity and prosociality. We first construct a theoretical model to generate predictions for the behavior of players in an ultimatum game who are influenced by social political identity. Then we use a novel subject pool-registered members of British political parties - to play the ultimatum game, and test our predictions. Incomes can either be unearned and untaxed (Treatment 1) or earned, taxed, and redistributed (Treatment 2). We find that the choices of the proposers and the responders are consistent with social identity theory (higher offers and lower minimum acceptable offers to ingroup members) although proposers show quantitatively stronger social identity effects. Moving from Treatment 1 to Treatment 2, offers by proposers decline and the minimum acceptable offers by responders (both as a proportion of income) also decline by almost the same amount, suggesting shared understanding that is characteristic of social norms.
    Keywords: social identity, prosocial behavior, ultimatum game, fiscal redistribution, entitlements
    JEL: D01 D03
    Date: 2018
  7. By: Fiorillo, D.;
    Abstract: This paper focuses on the demand side factors that determine access to health care and analyses the issues of unmet needs for health care and the reasons thereof in western EU countries. A probit model is estimated from a sample of the whole population, accounting for the possibility of individual selection in unmet needs for health care (UN) (selection equation). Expanded probit models (including the inverse Mills ratio) are then used on the reasons for unmet needs (RUN) with social capital and social support as determinants and using the European Union Statistics on Income and Living Conditions (EU-SILC) dataset carried out in 2006. In RUN equations, the findings show that females, large households, people with low income and financial constraints, the unemployed and those in poor health have a higher probability of declaring unmet needs due to economic costs. Additionally, people in tertiary education, those with high income and the employed have a higher probability of not visiting a doctor when needed due to time availability. Furthermore, the frequency of contact with friends and the ability to ask for help are correlated with a lower probability of unmet needs due to economic costs, while the frequency of contact with relatives is related with a lower probability of unmet needs due to time availability and distance. However, the ability to ask for help is also correlated with a higher probability of not having medical care due to time availability and the wait-and-see-approach.
    Keywords: unmet needs for healthcare; reasons for unmet needs; social capital; social support; EU Western countries; EU-SILC data; Heckman selection model;
    JEL: C35 I12 I18 Z1
    Date: 2018–10
  8. By: Matthias Sutter; Juergen Huber; Michael Kirchler; Matthias Stefan; Markus Walzl
    Abstract: There is a heated debate on whether markets erode social responsibility and moral behavior. However, it is a challenging task to identify and measure moral behavior in markets. Based on a theoretical model, we examine in an experiment the relation between trading volume, prices and moral behavior by setting up markets that either impose a negative externality on third parties or not. We find that moral behavior reveals itself in lower trading volume in markets with an externality, and in prices depending on the market structure. We further investigate individual characteristics that explain trading behavior in markets with externalities.
    Keywords: Morals, Markets, Competition, Experiment
    JEL: C92 D03 D62
    Date: 2018–10
  9. By: Carin van der Cruijsen; Joris Knoben
    Abstract: For stakeholders in the payment system seeking to influence the usage of specific payment instruments, it is important to know what drives consumers' choice of payment instrument. However, little is known about how the social environment influences payment behaviour. This study fills this gap by researching the relevance of peer effects for payment behaviour. We used the detailed payment diary data of Dutch consumers. Our findings show that payment behaviour is strongly influenced by the environment that people live in, especially when the environment is characterised by strong social cohesion. Hence, our study offers new insights into the diffusion of payment behaviour.
    Keywords: payment diaries; payment behaviour; peer effects; consumer survey
    JEL: A14 D12 D14 E42 E58 Z13
    Date: 2018–10
  10. By: Libertad González; Núria Rodríguez-Planas
    Abstract: We study the effect of social gender norms on the incidence of domestic violence. We use data for 28 European countries from the 2012 European survey on violence against women, and focus on first and second generation immigrant women. We find that, after controlling for country of residence fixed effects, as well as demographic characteristics and other source-country variables, higher gender equality in the country of ancestry is significantly associated with a lower risk of victimization in the host country. This suggests that gender norms may play an important role in explaining the incidence of intimate partner violence.
    Keywords: domestic violence, gender, Social Norms, immigrants, epidemiological approach
    JEL: I1 J6 D1
    Date: 2018–10
  11. By: Chulyoung Kim (Yonsei University); Sang-Hyun Kim (Yonsei University)
    Abstract: Andreoni and Bernheim (2009) considers a variant of the dictator game in which an exogenous force, called "nature", overturns the dictator's decision with some known probability. They find that as the likelihood of nature's intervention increased, more subjects mimicked the nature's move. We replicate their experiment, and examine a new treatment in which the dictator's decision is revealed to the recipient even when the dictator mimics nature's move. We find that (i) many dictators' decisions were affected by nature's intervention even when their choice was observed by the recipient, which suggests that the intervention altered not only the incentive to signal one's fair-mindedness but also the perception of appropriate action, but (ii) still dictators' behavior under the two treatments differed significantly, which suggests that the audience effect also matters greatly in AB's and our experiments.
    Keywords: Social image, Social norm, Dictator game, Altruism
    Date: 2018–10
  12. By: Titik Rosnani (Universitas Tanjungpura Pontianak, West Kalimantan, Indonesia Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective - The purpose of this study is to investigate the relationship between trust in the leader and affective commitment as a mediator between servant leadership behavior and extra-role behavior. In addition, the study examines, whether person-organization fit has a moderating effect. Methodology/Technique - In total, 250 teachers of the border area responded to the research questionnaires, which were then analyzed using structural equation modeling with a partial least squares approach. Findings - The outputs of this study indicate an indirect influence between the principal servant leadership behaviors and extra-role behaviors among teachers, which was mediated by trust in the principal and the teacher's affective commitment to the principal. Furthermore, the results show a significant and direct relationship between servant leadership behaviors towards trust in the principal, affective commitment, and extra-role behaviors. Trust in the principal and teacher's affective commitment also had a significant and direct effect on extra-role behavior. However, the person-organization fit which moderates the effect of servant leadership behaviors on extra-role behaviors did not have a significant or direct effect on extra-role behaviors, in fact, it actually weakened the influence of servant leadership behaviors on extra-role behaviors. Novelty - The findings of this study suggest that trust in the principal and teacher's affective commitment has an important moderating effect which must be managed to strengthen the relationship between servant leadership behaviors and extra-role behaviors.
    Keywords: Affective Commitment; Extra-role Behavior; Person- organization Fit; Servant Leadership Behavior; Trust in Leader.
    JEL: M10 M11 M19
    Date: 2018–09–27

This nep-soc issue is ©2018 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.