nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2019‒10‒14
ten papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Information Acquisition and Diffusion in Markets By Atayev, Atabek; Janssen, Maarten
  2. Political Effects of the Internet and Social Media By Enikolopov, Ruben; Petrova, Maria; Zhuravskaya, Ekaterina
  3. Homophily in Social Media and News Polarization By Luis Abreu; Doh-Shin Jeon
  4. Civic Engagement as a Second-Order Public Good: The Cooperative Underpinnings of the Accountable State By Kamei, Kenju; Putterman, Louis; Tyran, Jean-Robert
  5. Social Mobility Explains Populism, Not Inequality or Culture By Eric S. M. Protzer
  6. Job migration in a rivalry setting By Fletcher, R; Saavedra, S
  7. International knowledge flows between industry inventors and universities: The role of multinational companies By Fassio, Claudio; Geuna, Aldo; Rossi, Federica
  8. Drug Diffusion Through Peer Networks: The Influence of Industry Payments By Leila Agha; Dan Zeltzer
  9. An experimental Study on the Social Identity and Trust Behaviors of North Korean Refugees By Seo-Young Cho
  10. Sequential vs. Simultaneous Trust By Gross, Till; Servátka, Maroš; Vadovič, Radovan

  1. By: Atayev, Atabek; Janssen, Maarten
    Abstract: Consumers can acquire information through their own search efforts or through their social network. Information diffusion via word-of-mouth communication leads to some consumers free-riding on their "friends" and less information acquisition via active search. Free-riding also has an important positive effect, however, in that consumers that do not actively search themselves are more likely to be able to compare prices before purchase, imposing competitive pressure on firms. We show how market prices depend on the characteristics of the network and on search cost. For example, if the search cost becomes small, price dispersion disappears, while the price level converges to the monopoly level, implying that expected prices are decreasing for small enough search cost. More connected societies have lower market prices, while price dispersion remains even in fully connected societies.
    Keywords: consumer search; Social Networks; Word-of-Mouth Communication
    JEL: D43 D83 D85
    Date: 2019–10
  2. By: Enikolopov, Ruben; Petrova, Maria; Zhuravskaya, Ekaterina
    Abstract: How do the internet and social media affect political outcomes? We review empirical evidence from the recent political economy literature focusing especially on the work that considers those features that distinguish the internet and social media from traditional offline media, such as low barriers to entry and reliance on user-generated content. We discuss the main results about the effects of the internet, in general, and social media, in particular, on voting, street protests, attitudes toward government, political polarization, xenophobia, and politicians' behavior. We also review evidence on the role of social media in the dissemination of false news and summarize results about the strategies employed by autocratic regimes to censor internet and to use social media for surveillance and propaganda. We conclude by highlighting the key open questions about how the internet and social media shape politics in democracies and autocracies.
    Keywords: internet; social media; survey
    Date: 2019–09
  3. By: Luis Abreu (Toulouse School of Economics, 21 Allée de Brienne, 31015 Toulouse Cedex 6, France); Doh-Shin Jeon (Toulouse School of Economics, 21 Allée de Brienne, 31015 Toulouse Cedex 6, France)
    Abstract: We study how media bias is affected by the structure of social networks on social media. We consider an ad-financed media firm which chooses the ideological location of its news and targets consumers who can share the news with their followers on an online social media. After studying how a targeted consumer’s incentive to share the news is shaped by the network structure of her followers, we study the firm’s strategy to maximize the breadth of news sharing and find that when the mean (respectively, the variance) of followers’ ideological locations is a convex (respectively, concave) function of a direct consumer’s location, the media firm is likely to produce polarized news. The analysis of the case in which consumers are uniformly distributed reveals that news polarization is more likely to occur as the degree of homophily increases. We also find that media competition makes polarization more likely.
    Keywords: media bias; online social networks; homophily; sharing, polarization
    JEL: D21 D85 L82
    Date: 2019–09
  4. By: Kamei, Kenju; Putterman, Louis; Tyran, Jean-Robert
    Abstract: Effective states provide public goods by taxing their citizens and imposing penalties for non-compliance. However, accountable government requires that enough citizens are civically engaged. We study the voluntary cooperative underpinnings of the accountable state by conducting a two-level public goods experiment in which civic engagement can build a sanction scheme to solve the first-order public goods dilemma. We find that civic engagement can be sustained at high levels when costs are low relative to the benefits of public good provision. This cost-to-benefit differential yields what we call a "leverage effect" because it transforms modest willingness to cooperate into the larger social dividend from the power of taxation. In addition, we find that local social interaction among subgroups of participants also boosts cooperation.
    Keywords: Civic engagement; Cooperation; Experiment; Public goods provision
    JEL: C92 D02 D72 H41
    Date: 2019–09
  5. By: Eric S. M. Protzer (Center for Global Development)
    Abstract: What is driving contemporary populism, for example Brexit, Trump, the Gilets Jaunes, and Five-Star? Commonly-accepted answers are divided into two schools of thought, one economic and one cultural. The main explanation in the former camp is income inequality; those in the latter are social media-induced ideological polarization, unprecedented levels of immigration, and older generations reacting against millennial values. This paper exploits geographic variation in the incidence of populism to apply cross-sectional regression analysis to these arguments, and concludes that they are highly unconvincing. Instead, the thus-largely overlooked factor of social mobility is found to have far greater explanatory power. Four settings are analyzed: the 2016 US Presidential Election, the 2017 French Presidential Election, the 2019 European Parliament Elections, and the political stability of developed countries in 2018. The article contends that the decisiveness of social mobility as an explanatory variable for populism is plausibly rooted in universal human conceptions of fairness.
    Keywords: Inclusive Growth, Populism
    Date: 2019–09
  6. By: Fletcher, R; Saavedra, S
    Abstract: The importance of social networks in job search and migration have been well documented. However, spreading information too widely throughout networks when opportunities arise can easily lead to the tragedy of the commons – too many people depleting a limited opportunity can mean no one benefits in the end. Hence, despite the generally positive value of large social networks, we should expect the strategic sharing of information within networks. To better understand this, we study the co-migration decisions of social connections through the movements of gold miners in Colombia. In this setting, we document three facts that are easily interpretable with a model of referrals and scarce resources. First, while working with close social connections is associated with higher production, having too many miners present is ultimately associated with lower production. Second, in line with the first result, we find that more productive miners, for whom depletion of resources is a greater concern, invite fewer social connections. Finally, the connections that miners are willing to invite are heavily selected; miners tend to invite productive over non-productive peers
    Keywords: Social networks, Migration, Scarce resources
    JEL: O15 L14
    Date: 2019–10–02
  7. By: Fassio, Claudio (Lund University); Geuna, Aldo (University of Torino); Rossi, Federica (University of London)
    Abstract: We investigate the determinants of industry researchers’ interactions with universities in different localities, distinguishing between local and international universities. We analyze the extent to which local and international interactions are enabled by different types of individual personal networks (education, career based), and by their access to different business networks through their employer companies (local vs. domestic or international multinational company networks). We control for selection bias and numerous other individual and firm-level factors identified in the literature as important determinants of interaction with universities. Our findings suggest that industry researchers’ personal networks play a greater role in promoting interactions with local universities (i.e. in the same region, and other regions in the same country) while researcher employment in a multinational is especially important for establishing interaction with universities abroad.
    Keywords: University-industry interaction; international knowledge flows; MNEs; social network; education network; career network
    JEL: F23 I23 L24 O31
    Date: 2019–10–04
  8. By: Leila Agha; Dan Zeltzer
    Abstract: Pharmaceutical companies' marketing efforts primarily target physicians, often through individual detailing that entails monetary or in-kind transfers. We study how peer influence broadens these payments' reach beyond the directly paid physicians. Combining Medicare prescriptions and Open Payments data for anticoagulant drugs, we document that pharmaceutical payments target highly connected physicians. We exploit within-physician variation in payment exposure over time to estimate the payments' influence. Unlike the paid doctor, peer physicians are not directly selected by the pharmaceutical company on the basis of their expertise or enthusiasm for the target drug. Yet, following a large payment, prescriptions for the target drug increase both by the paid physician and the paid physician's peers. These peer effects influence doctors who share patients with the paid physician, even when the two doctors are not affiliated with the same group practice. We find no evidence that payments reduce prescriptions among high-risk patients. Over the period 2014--2016, physician payments associated with anticoagulant marketing increased the drugs' prescription volume by 23 percent, with peer spillovers contributing a quarter of the increase.
    JEL: I11 O33
    Date: 2019–10
  9. By: Seo-Young Cho (Philipps-Universitaet Marburg)
    Abstract: Many of North Korean refugees in South Korea struggle to reconcile their different identities of: being a Korean who shares ethnicity with South Koreans vs. being a North Korean who fled from an estranged neighboring country. This paper shows that emphasizing the Korean unity can help their integration in South Korea, despite considerable differences caused by seven-decade long separation between the North and the South. The results of a behavioral experiment with 130 North Korean refugees conducted in this study suggest that the unified Korean identity stimulates the refugees’ social trust with South Koreans, cooperation in South Korea, and their self-confidence.
    Keywords: North Korean Refugees, Identity, Social Trust, Cooperation, Confidence, Integration
    JEL: D91 J15
    Date: 2019
  10. By: Gross, Till; Servátka, Maroš; Vadovič, Radovan
    Abstract: We examine theoretically and experimentally the implications of trust arising under sequential and simultaneous designs, where one player makes an investment choice, and another player decides whether to share the investment gains. We show analytically that in some cases the sequential design may be outperformed by the simultaneous design. In an experiment we find that the investment levels and sharing rates are higher in the sequential design, but there are no corresponding differences in beliefs. We conjecture that this happens because in the sequential design substantially more trust is necessary to induce cooperation. Our data strongly support this conjecture.
    Keywords: trust, investment, efficiency, institutional design
    JEL: C9 C91 D02 D9
    Date: 2019–10–03

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