nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2019‒04‒08
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Coming out in America: AIDS, Politics, and Cultural Change By Raquel Fernández; Sahar Parsa; Martina Viarengo
  2. Voting and Contributing While the Group is Watching By Emeric Henry; Charles Louis-Sidois
  3. Tragedy of the Commons and Evolutionary Games in Social Networks: The Economics of Social Punishment By Marco, Jorge; Goetz, Renan
  4. Network Formation and Disruption - An Experiment - Are Efficient Networks too Complex? By Sonja Brangewitz; Behnud Mir Djawadi; Angelika Endres; Britta Hoyer
  5. Network Formation in Large Groups By Choi, S; Goyal, S.; Moisan, F.
  6. Immigration, Social Networks and Occupational Mismatch By Alaverdyan, Sevak; Zaharieva, Anna
  7. Our distrust is very expensive By Rahul Deb; Matthew Mitchell; Mallesh Pai
  8. Transaction-tax evasion in the housing market By José Garcia Montalvo; Amedeo Piolatto; Josep M. Raya
  9. Warm-Glow Giving in Networks with Multiple Public Goods By Richefort, Lionel
  10. The Strength of Weak Leaders - An Experiment on Social Influence and Social Learning in Teams By Büchel, Berno; Klößner, Stefan; Lochmüller, Martin; Rauhut, Heiko

  1. By: Raquel Fernández; Sahar Parsa; Martina Viarengo
    Abstract: The last few decades witnessed a dramatic change in public opinion towards gay people. This paper uses a difference-in-difference empirical strategy to investigate the hypothesis that the AIDS epidemic and the ensuing endogenous political process led to this transformation. We show that the process of change was discontinuous over time and show suggestive evidence that the '92 presidential election followed by the “don't ask, don't tell” debate led to a change in attitudes. In accordance with our hypothesis, this change was greater in states with high-AIDS rate. Our analysis suggests that if individuals in low-AIDS states had experienced the same average AIDS rate as a high-AIDS state, the change in their approval rate from the '70s to the '90s would have been 50 percent greater.
    JEL: J15 P16 Z13
    Date: 2019–03
  2. By: Emeric Henry (Département d'économie); Charles Louis-Sidois
    Abstract: Members of groups and organizations often have to decide on rules that regulate their contributions to common tasks. They typically differ in their propensity to contribute and often care about the image they project: in particular, they want to be perceived by other group members as being high contributors. In such environments we study, from both a positive and normative perspective, the interaction between the way members vote on rules and their subsequent contribution decisions. We show how endogenous norms can emerge. We study in particular the role played by the visibility of individual actions, votes or contributions. While making votes visible always increases welfare in our setting, making contributions public can be welfare decreasing as it makes some rules more likely to be rejected.
    Keywords: Image concern; Voting; Public good
    JEL: D71 D72 H41 D23
    Date: 2018–09
  3. By: Marco, Jorge; Goetz, Renan
    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: Research Methods/ Statistical Methods
    Date: 2017–07–13
  4. By: Sonja Brangewitz; Behnud Mir Djawadi; Angelika Endres; Britta Hoyer
    Abstract: We experimentally study the emergence of networks under a known external threat. To be more specific, we deal with the question if subjects in the role of a strategic Designer are able to form safe and efficient networks while facing a strategic Adversary who is going to attack their networks. This investigation relates theoretical predictions by Dziubinski and Goyal (2013) to actual observed behaviour. Varying the costs for protecting nodes, we designed and tested two treatments with different predictions for the equilibrium network. Furthermore, the influence of the subjects' farsightedness on their decision-making process was elicited and analysed. We find that while subjects are able to build safe networks in both treatments, equilibrium networks are only built in one of the two treatments. In the other treatment, predominantly safe networks are built but they are not efficient. Additionally, we find that farsightedness -as measured in our experiment- has no influence on whether subjects are able to build safe or efficient networks.
    Keywords: Research Methods/ Statistical Methods
    Date: 2017–06–23
  5. By: Choi, S; Goyal, S.; Moisan, F.
    Abstract: We conduct an experiment to understand the principles that govern network formation. The design of the experiment builds on a model of linking and efforts taken from Galeotti and Goyal [2010]. In order to reduce cognitive complexity facing human subjects and facilitate learning, we develop a new experimental platform that integrates a network visualization tool using an algorithm of Barnes and Hut [1986] with an interactive tool of asynchronous choices in continuous time. Our experiment provides strong support for macroscopic predictions of the theory: there is specialization in linking and efforts across all treatments. Moreover, and in line with the theory, the specialization is more pronounced in larger groups. Thus subjects abide by the law of the few. Information on payoffs provided to subjects affects their behavior and yields differential welfare consequences. In the treatment where subjects see only their own payoffs, in large groups, the most connected individuals compete fiercely-they exert large efforts and have small earnings. By contrast, when a subject sees everyone's payoffs, in large groups, the most connected individuals engage in less intense competition-they exert little effort and have large earnings. The effects of information are much more muted in small groups.
    JEL: C92 D83 D85 Z13
    Date: 2019–03–28
  6. By: Alaverdyan, Sevak (Center for Mathematical Economics, Bielefeld University); Zaharieva, Anna (Center for Mathematical Economics, Bielefeld University)
    Abstract: In this study we investigate the link between the job search channels that workers use to find employment and the probability of occupational mismatch in the new job. Our specific focus is on differences between native and immigrant workers. We use data from the German Socio-Economic Panel (SOEP) over the period 2000-2014. First, we document that referral hiring via social networks is the most frequent single channel of generating jobs in Germany; in relative terms referrals are used more frequently by immigrant workers compared to natives. Second, our data reveals that referral hiring is associated with the highest rate of occupational mismatch among all channels in Germany. We combine these findings and use them to develop a theoretical search and matching model with two ethnic groups of workers (natives and immigrants), two search channels (formal and referral hiring) and two occupations. When modeling social networks we take into account ethnic and professional homophily in the link formation. Our model predicts that immigrant workers face stronger risk of unemployment and often rely on recommendations from their friends and relatives as a channel of last resort. Furthermore, higher rates of referral hiring produce more frequent occupational mismatch of the immigrant population compared to natives. We test this prediction empirically and confirm that more intensive network hiring contributes significantly to higher rates of occupational mismatch among immigrants. Finally, we document that the gaps in the incidence of referrals and mismatch rates are reduced among second generation immigrants indicating some degree of integration in the German labour market.
    Keywords: job search, referrals, social networks, occupational mismatch, immigration
    Date: 2019–03–29
  7. By: Rahul Deb; Matthew Mitchell; Mallesh Pai
    Abstract: Motivated by reputation management in a variety of different markets for ``expertise'' (such as online content providers and experts in organizations), we develop a novel repeated-game framework in which a principal screens a strategic agent whose type determines the rate at which he privately receives payoff relevant information. The stage game is a bandit setting, where the principal chooses whether or not to experiment with a risky arm which is controlled by an agent who privately knows its type. Irrespective of type, the agent strategically chooses output from the arm to maximize the duration of experimentation. Experimentation is only potentially valuable to the principal if the arm is of the high type. Our main insight is that reputational incentives can be exceedingly strong: the agent makes inefficient output choices in all equilibria (subject to a mild refinement) and that this can result in market breakdown even when the uncertainty about the agent's type is arbitrarily small. We show that (one-sided) transfers do not prevent this inefficiency and we suggest alternate ways to improve the functioning of these markets.
    Keywords: reputation, repeated games of imperfect public monitoring, relational contracting, strategic experimentation, markets for expertise, media
    JEL: D82 D83 D86
    Date: 2019–03–22
  8. By: José Garcia Montalvo; Amedeo Piolatto; Josep M. Raya
    Abstract: We model the behaviour of a buyer trying to evade the real estate transfer tax. We identify over-appraisal as a key, easily-observable element that is inversely related with tax evasion. We conclude that the tax authority could focus auditing e orts on low-appraisal transactions. We include `behavioural'components (shame and stigma) allowing to introduce buyers'(education) and societal (social capital) characteristics that explain individual and idiosyncratic variations.Our empirical analysis con rms the predictions using a unique database, where we directly observe: real payment, value declared to the authority,appraisal, buyers' educational level and local levels of corruption and trust.
    Keywords: transfer tax, tax evasion, second-hand housing market, overappraisal, Loan-To-Value, corruption, social capital, stigma, shame, education
    JEL: G21 H26 R21
    Date: 2019–03
  9. By: Richefort, Lionel
    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: Research Methods/ Statistical Methods
    Date: 2017–07–13
  10. By: Büchel, Berno; Klößner, Stefan; Lochmüller, Martin; Rauhut, Heiko
    Abstract: We investigate how the selection process of a leader affects team performance with respect to social learning. We use a lab experiment in which an incentivized guessing task is repeated in a star network with the leader at the center. Leader selection is either based on competence, on self-confidence, or made at random. Teams with random leaders do not underperform compared to competent leaders, and they even outperform teams whose leader is selected based on self-confidence. The reason is that random leaders are better able to use the knowledge within the team. We can show that it is the declaration of the selection procedure which makes non-random leaders overly influential. We set up a horse race between several rational and naïve models of social learning to investigate the micro-level mechanisms. We find that overconfidence and conservatism contribute to the fact that overly influential leaders mislead their team.
    Keywords: Research Methods/ Statistical Methods
    Date: 2018–02–26

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.
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.