nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2019‒01‒28
seventeen papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Culture and Colonial Legacy: Evidence from Public Goods Games By Latika Chaudhary; Jared Rubin; Sriya Iyer; Anand Shrivastava
  2. Money Is More Than Memory By Maria Bigoni; Gabriele Camera; Marco Casari
  3. Does Pre-Play Social Interaction Improve Negotiation Outcomes? By Pablo Brañas-Garza; Antonio Cabrales; Guillermo Mateu; Angel Sanchez; Angela Sutan
  4. Do Sharing Economy Platforms Foster Trust in Others? Evidence from a Survey Experiment By Godefroy DangNguyen; Sylvain Dejean; Thierry Pénard
  5. Does Scientific Progress Affect Culture? A Digital Text Analysis By Michela Giorcelli; Nicola Lacetera; Astrid Marinoni
  6. Is Trust in Companies Rooted in Social Trust, or Regulatory Quality, or Both? By Markus Leibrecht; Hans Pitlik
  7. Walls of Glass: Measuring Deprivation in Social Participation By Nicolai Suppa
  8. Identifying cooperation for innovation: A comparison of data sources By Fritsch, Michael; Piontek, Matthias; Titze, Mirko
  9. Managerial Networks and Shareholder Value: Evidence from Sudden Deaths By Kirsten Tangaa Nielsen; Felix von Meyerinck; ;
  10. Mastering Panel 'Metrics: Causal Impact of Democracy on Growth By Shuowen Chen; Victor Chernozhukov; Iv\'an Fern\'andez-Val
  11. Heterogeneity of social information programs: the role of identity and values By Jacopo Bonan; Cristina Cattaneo; Giovanna d'Adda; Massimo Tavoni
  12. Dynamic effects of enforcement on cooperation By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet
  13. The relationship between trust, cognitive skills, and democracy - evidence from 30 countries around the world By Schnitzlein, Daniel D
  14. Group Size and Network Formation By Melguizo, Isabel
  15. In Military We Trust: The Effect of Managers' Military Background on Mutual Fund Flows By Alexander Cochard; Stephan Heller; Vitaly Orlov
  16. How Social Capital, Supply Chain Integration, and Customer Loyalty Affect Performance By Mask, Rickey; Works, Richard
  17. On money, debt, trust and central banking By Claudio Borio

  1. By: Latika Chaudhary (Naval Postgraduate School); Jared Rubin (Chapman University); Sriya Iyer (University of Cambridge); Anand Shrivastava (Azim Premji University)
    Abstract: We conduct a public goods game in three small towns in the Indian state of Rajasthan. Due to historical military conquest, until 1947 these towns were on (barely) opposite sides of a colonial border separating British India from the Princely States. Our research design offers a treatment comparison between the towns of (British) Kekri and (Princely) Sarwar, and a control comparison between (Princely) Sarwar and (Princely) Shahpura. We find no significant difference in contributions to home town groups, but a significant difference in contributions to mixed town groups. Participants in (British) Kekri are more co-operative (i.e., contribute more) in mixed town groups compared to those in (Princely) Sarwar. We find the differences are driven by individuals with family ties to the towns, and we find no differences in the control comparison. Our results highlight the enduring effects of colonial rule on social norms of co-operation
    Keywords: cultural transmission, colonialism, public goods game, natural experiment, lab-in-the-field experiment, India
    JEL: C91 C93 C71 H41 H73 N35 N45 O17 Z1
    Date: 2018
  2. By: Maria Bigoni (University of Bologna & IZA); Gabriele Camera (Chapman University & University of Bologna); Marco Casari (University of Bologna & IZA)
    Abstract: Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.
    Keywords: Cooperation, intertemporal trade, experiments, institutions, social norms.
    JEL: C70 C90 D03 E40
    Date: 2018
  3. By: Pablo Brañas-Garza; Antonio Cabrales; Guillermo Mateu; Angel Sanchez; Angela Sutan
    Abstract: We study experimentally the impact of pre-play social interactions on negotiations. These interactions are often complex. Thus, we attempt to isolate the impact of several of its more common components: conversations, food, and beverages, which could be alcoholic or nonalcoholic. To do this, our subjects take part in a standardized negotiation (complex and simple) under six conditions: without interaction, interaction only, and interactions with water, wine, water and food and wine and food. We find that none of the treatments improve the outcomes over the treatment without interactions. We also study trust and reciprocity in the same context. For all-male groups, we find the same lack of superiority of interaction treatments over no interaction. For all-female groups, some very simple social interactions have a positive impact on trust.
    Keywords: negotiation, trust, business meals, social interactions, alcohol
    JEL: C91 M11 I18
    Date: 2018
  4. By: Godefroy DangNguyen (EA LEGO,IMT Atlantique, Gis M@rsouin); Sylvain Dejean (CEREGE, University of La Rochelle); Thierry Pénard (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)
    Abstract: The rise of digital platforms in which peers can share goods or services has drawn attention to the ability of these platforms to foster trust amongst their members. Combining experimental methods with an online survey of 2,000 representative Internet users in France, we investigate whether users of sharing economy platforms are more likely to cooperate in the context of a trust game. We focus our attention on the carsharing platform, Blablacar. Our main findings show that neither trust nor trustworthiness increase with the use of BlaBlaCar or other similar sharing platforms. Moreover, cooperation is not fostered if the trust game is played by two members of BlaBlaCar, suggesting that digital platforms do not create interpersonal trust that is transferable outside of these platforms.
    Keywords: Trust, Sharing economy, Platforms
    Date: 2018–12
  5. By: Michela Giorcelli; Nicola Lacetera; Astrid Marinoni
    Abstract: We study the interplay between scientific progress and culture through text analysis on a corpus of about eight million books, with the use of techniques and algorithms from machine learning. We focus on a specific scientific breakthrough, the theory of evolution through natural selection by Charles Darwin, and examine the diffusion of certain key concepts that characterized this theory in the broader cultural discourse and social imaginary. We find that some concepts in Darwin’s theory, such as Evolution, Survival, Natural Selection and Competition diffused in the cultural discourse immediately after the publication of On the Origins of Species. Other concepts such as Selection and Adaptation were already present in the cultural dialogue. Moreover, we document semantic changes for most of these concepts over time. Our findings thus show a complex relation between two key factors of long-term economic growth – science and culture. Considering the evolution of these two factors jointly can offer new insights to the study of the determinants of economic development, and machine learning is a promising tool to explore these relationships.
    JEL: N00 O30 Z1
    Date: 2019–01
  6. By: Markus Leibrecht (Henley Business School, University of Reading Malaysia); Hans Pitlik (Austrian Institute of Economic Research WIFO, Vienna, Austria)
    Abstract: While trust in the business sector is crucial for well-functioning markets, there is surprisingly little empirical work on its sources. Available research recognizes social trust as a major force explaining confidence in political institutions. Regulation is frequently advocated to foster trust in companies as it is supposed to reduce scope for opportunistic behavior. Based on individual level data from World Values Survey/European Values Studies and economic regulation data from the Economic Freedom of the World-project the paper empirically investigates joint effects of social trust, intensity and quality of regulation on public trust in major companies. Our findings suggest that it is not the intensity of economic regulation per se which matters for trust in companies but that the impartiality with which rules are enforced is decisive, even when we control for social trust. Trust in business can be facilitated by an implicit guarantee of governments to fair and impartial treatment.
    Keywords: Social Trust, Trust in Companies, Economic Regulation, World Values Survey
    JEL: D90 L50 P12
    Date: 2018–05
  7. By: Nicolai Suppa
    Abstract: This paper proposes a measure for deprivation in social participation, an important but so far neglected dimension of human well-being. Operationalisation and empirical implementation of the measure are conceptually guided by the capability approach. Essentially, the paper argues that deprivation in social participation can be convincingly established by drawing on extensive non-participation in customary social activities. In doing so, the present paper synthesizes philosophical considerations, axiomatic research on poverty and deprivation, and previous empirical research on social exclusion and subjective well-being. An application using high-quality German survey data supports the measure’s validity. Specifically, the results suggest, as theoretically expected, that the proposed measure is systematically different from related concepts like material deprivation and income poverty. Moreover, regression techniques reveal deprivation in social participation to reduce life satisfaction substantially, quantitatively similar to unemployment. Finally, questions like preference vs. deprivation, cross-country comparisons, and the measure’s suitability as a social indicator are discussed.
    Keywords: Social participation, capability approach, deprivation, life satisfaction, multidimensional poverty, SOEP
    Date: 2018
  8. By: Fritsch, Michael; Piontek, Matthias; Titze, Mirko
    Abstract: The value of social network analysis is critically dependent on the comprehensive and reliable identification of actors and their relationships. We compare regional knowledge networks based on different types of data sources, namely, co-patents, co-publications, and publicly subsidised collaborative Research and Development projects. Moreover, by combining these three data sources, we construct a multilayer network that provides a comprehensive picture of intraregional interactions. By comparing the networks based on the data sources, we address the problems of coverage and selection bias. We observe that using only one data source leads to a severe underestimation of regional knowledge interactions, especially those of private sector firms and independent researchers. The key role of universities that connect many regional actors is identified in all three types of data.
    Keywords: knowledge interactions,social network analysis,regional innovation systems,data sources
    JEL: O30 R12 R30
    Date: 2019
  9. By: Kirsten Tangaa Nielsen; Felix von Meyerinck; ;
    Abstract: This paper investigates the causal effect of connections among top executives and directors of different firms on shareholder value using a quasi-natural experiment. Our identification strategy rests on the idea that sudden deaths trigger unexpected and exogenous dissolutions of connections, which enables us to isolate the value of managerial connections by studying stock price reactions at firms where managers connected to a suddenly deceased manager work. Our results show that firms connected to a suddenly deceased manager experience a statistically significant reduction in shareholder value between 1.6 and 2.6 million USD, which is consistent with the notion that managerial connections foster shareholder value. When exploring the cross-sectional variation, we find evidence that connections to inside directors, connections established via previously shared work engagements, and within-industry connections are most valuable.
    Keywords: Social networks, Firm value, Sudden death
    JEL: L14 G14 G34
    Date: 2018–10
  10. By: Shuowen Chen; Victor Chernozhukov; Iv\'an Fern\'andez-Val
    Abstract: The relationship between democracy and economic growth is of long-standing interest. We revisit the panel data analysis of this relationship by Acemoglu, Naidu, Restrepo and Robinson (forthcoming) using state of the art econometric methods. We argue that this and lots of other panel data settings in economics are in fact high-dimensional, resulting in principal estimators -- the fixed effects (FE) and Arellano-Bond (AB) estimators -- to be biased to the degree that invalidates statistical inference. We can however remove these biases by using simple analytical and sample-splitting methods, and thereby restore valid statistical inference. We find that the debiased FE and AB estimators produce substantially higher estimates of the long-run effect of democracy on growth, providing even stronger support for the key hypothesis in Acemoglu, Naidu, Restrepo and Robinson (forthcoming). Given the ubiquitous nature of panel data, we conclude that the use of debiased panel data estimators should substantially improve the quality of empirical inference in economics.
    Date: 2019–01
  11. By: Jacopo Bonan (Politecnico di Milano, EIEE and LdA); Cristina Cattaneo (EIEE, Centro Euro-Mediterraneo sui Cambiamenti Climatici and FEEM); Giovanna d'Adda (University of Milan); Massimo Tavoni (Politecnico di Milano, EIEE and CMCC)
    Abstract: Social information programs are increasingly used to nudge behavioral change, but still relatively little is known about sources of heterogeneity in their impact. This paper examines whether individual values are associated with heterogeneous responses to social information. Using data from a large field experiment of household energy conservation, we combine electricity metering and survey data to study how environmental values affect the impact of the program. We then leverage the role of values by augmenting social information messages with an environmental self-identity prime. Results show that values are important drivers of heterogeneity. Moreover, enhancing social information by making environmental self-identity more salient boosts the social information impact, but only among individuals who acted pro-environmentally in the past.
    Keywords: Energy consumption, Environmental identity, Social norms, RCT
    JEL: D91 Q49
    Date: 2019–01–21
  12. By: Roberto Galbiati (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (ECON - Département d'économie - Sciences Po); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In situations where social payoffs are not aligned with private incentives, enforcement with fines can be a way to sustain cooperation. In this paper we show, by the means of a lab experiment , that past fines can have an effect on current behavior even when no longer in force. We document two mechanisms: a) past fines affect directly individuals' future propensity to cooperate; b) when fines for non cooperation are in place in the past, individuals experience higher levels of cooperation from partners and, consistent with indirect reciprocity motives, are in turn nicer towards others once these fines have been removed. This second mechanism is empirically prevalent and, in contrast with the first, induces a snowball effect of past enforcement. Our results can inform the design of costly enforcement policies.
    Keywords: experiments,Laws,social values,cooperation,learning,spillovers,persistence of institutions,repeated games
    Date: 2018
  13. By: Schnitzlein, Daniel D
    Abstract: Based on highly comparable data from the OECD PIAAC Programme, this note analyzes the relationship between generalized trust and cognitive skills among 30 countries around the world. The results show that the strength and direction of the relationship is not a universal characteristic but varies substantially among countries worldwide. A detailed descriptive analysis of this variation provides evidence that the relationship strengthens with the level of democracy in a country. In a second step, German separation and reunification is used as external variation in the level of democracy in the German PIAAC subsample. The results support the evidence from the cross-country analysis. Thus, the institutional framework in a country not only shapes an individual's level of trust but also amplifies the relationship between individual characteristics such as cognitive skills and generalized trust.
    Keywords: Generalized trust; political institutions; cognitive skills; PIAAC
    JEL: P51 Z13
    Date: 2019–01
  14. By: Melguizo, Isabel
    Abstract: This paper analyze network formation, following the canonical model of Jackson and Wolinsky (JET, 1996) when individuals, that come in two types care about how their type is represented in their neighborhood. We focus on pairwise stable networks. We analyze equilibrium networks, as well as, efficient ones. Segregation measures on equilibrium networks are also analyzed.
    Keywords: Pairwise stability, segregation, welfare
    JEL: D62 D71
    Date: 2019–01–12
  15. By: Alexander Cochard; Stephan Heller; Vitaly Orlov
    Abstract: This paper shows that trust-building characteristics of fund managers affect purchase decisions of mutual fund investors. We exploit variation in fund managers’ prior affiliations with the well-trusted U.S. military institution and relate it to fund flows. Results show that funds with ex-military managers have 43% higher flows and grow by 14.4% p.a. faster relative to other funds. Investor inclination toward military managers strengthens with manager’s military involvement and its salience, and nationwide confidence in the military. Military managers’ superiority in competition for investor funds is not due to variation in fund or managerial attributes and robust to several alternative explanations.
    Keywords: Trust, Mutual Funds, Investment Decision, Fund Managers, Military
    JEL: G11 G23
    Date: 2018–12
  16. By: Mask, Rickey; Works, Richard
    Abstract: This study identifies a common variable from supplier to consumer within the firms and supply chains of the Northeastern United States. Social capital appears to be significant from supply chain all the way to the consumer. Retail firms and consumers within the Northeast were chosen as the diversity of cultures and population density were ideal to provide the 405 participant population in this study. The study argues that social capital mediates the relationship between supply chain integration and firm performance within the supply chain. Findings were similar to that of previous works in the manufacturing and service industries; however, the results of this study were unique as they directed the focus of the research instruments on the retail industry.
    Keywords: Social capital, supply chain, customer loyalty, performance, retail industry
    JEL: M10
    Date: 2018–12–26
  17. By: Claudio Borio
    Abstract: This essay examines in detail the properties of a well functioning monetary system - defined as money plus the mechanisms to execute payments - in both the short and long run, drawing on both theory and the lessons from history. It stresses the importance of trust and of the institutions needed to secure it. Ensuring price and financial stability is critical to nurturing and maintaining that trust. In the process, the essay addresses several related questions, such as the relationship between money and debt, the viability of cryptocurrencies as money, money neutrality, and the nexus between monetary and financial stability. While the present monetary system, with central banks and a prudential apparatus at its core, can and must be improved, it still provides the best basis to build on.
    Keywords: monetary system, money, debt, payments, trust, monetary stability, financial stability, central bank
    JEL: E00 E30 E40 E50 G21 N20
    Date: 2019–01

This nep-soc issue is ©2019 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.
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