nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2019‒11‒18
seven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Social Distance and Parochial Altruism: An Experimental Study By Béatrice Boulu-Reshef; Jonah Schulhofer-Wohl
  2. The dynamics of costly social norms By H Peyton Young; Sam Jindani
  3. Credit supply, uncertainty and trust: the role of social capital By Maddalena Galardo; Maurizio Lozzi; Paolo Emilio Mistrulli
  4. Watch your Words: An Experimental Study on Communication and the Opportunity Cost of Delegation By Armenak Antinyan; Luca Corazzini; Elena D’Agostino; Filippo Pavesi
  5. Generosity and Wealth : Experimental Evidence from Bogota Stratification By Blanco, M.; Dalton, Patricio
  6. A Theory of Cultural Revivals By Murat Iyigun; Jared Rubin; Avner Seror
  7. The Speed of Innovation Diffusion in Social Networks By H Peyton Young; Itai Arieli; Yakov Babichenko; Ron Peretz

  1. By: Béatrice Boulu-Reshef (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne); Jonah Schulhofer-Wohl (University of Virginia, The Department of Politics)
    Abstract: Parochial altruism-individual sacrifice to benefit the in-group and harm an out-group-undermines inter-group cooperation and is implicated in a plethora of politically-significant behaviors. We report new experimental findings about the impact of variation in social distance within the in-group together with variation in social distance between the in-and out-groups on parochial altruism. Building from a minimal group paradigm setup , we find that differential social distance has a systematic effect on individual choice in a setting of potential inter-group conflict. In particular, parochial altruism is stimulated when individuals' distance to both their in-and out-group is high. A long-standing finding about behavior in contexts of inter-group conflict is that low social distance facilitates collective action. Our results suggest that the effects of high social distance may create a potential additional pathway to group-based individual action. Research on inter-group conflict and collective action can be advanced by investigating such effects.
    Date: 2019–05–21
  2. By: H Peyton Young; Sam Jindani
    Abstract: Social norms are costly if they are harmful for individuals but they remain in place for long periods of time because deviations are punished by members of the community. Examples include female genital cutting, foot binding, and codes of honour such as duelling. These and many other costly norms are seldom ‘all or nothing’: they are multidimensional and can take many altern¬ative forms. We develop a general theory of norm dynamics that focuses on the intermediate-run behaviour of such systems. Al-though in the (very) long run costly norms tend to die out, in the intermediate run transitions to less costly versions of the norm may occur that significantly retard its ultimate abandonment.
    Date: 2019–11–04
  3. By: Maddalena Galardo (Bank of Italy); Maurizio Lozzi (Bank of Italy); Paolo Emilio Mistrulli (Bank of Italy)
    Abstract: Despite social capital being widely acknowledged as a key factor in the functioning of financial markets, the evidence on the channels through which it operates is still scant. In this paper we isolate one possible channel and investigate whether social capital plays a role in mitigating the impact of uncertainty shocks on bank credit supply. We exploit both the huge rise in the level of uncertainty that followed the Lehman Brothers default and a very granular and rich loan-level dataset from the Italian Credit register that allows us to clearly disentangle demand and supply factors. We find that social capital makes credit markets more resilient to uncertainty shocks, especially when informational asymmetries between banks and borrowers are more severe.
    Keywords: credit supply, uncertainty, social capital, trust, loan applications
    JEL: A13 G01 G2
    Date: 2019–11
  4. By: Armenak Antinyan (Wenlan School of Business, Zhongnan University of Economics and Law); Luca Corazzini (Department of Economics, University Of Venice Cà Foscari; Center for Experimental Research in Management and Economics (CERME)); Elena D’Agostino (Elena D’Agostino Department of Economics, University of Messina); Filippo Pavesi (School of Economics and Management, LIUC Carlo Cattaneo University; Stevens Institute of Technology, School of Business, Hoboken)
    Abstract: Communication has been shown to play a positive role in promoting trust, yet there is no evidence on how sensitive this result is to the size of the gains from cooperation. To investigate this issue, we adopt an experimental design in which a trustee can send a free form message to a trustor, before the latter makes a delegation choice, by selecting whether or not to allow the trustee to decide how to share a given sum between the two of them. We allow the opportunity cost of delegation to vary and find that the trustee makes use of non-precise promises prevalently when the opportunity cost of delegation is low. Moreover, communication increases the trustor’s beliefs on the amount that the trustee will choose to transfer, only when this cost is high to start with. This attenuates the effect of the size of the opportunity cost of delegation on the trustor’s choice. We also find evidence of deception, but in some circumstances the trustee is overoptimistic about her ability to deceive. Indeed, in the presence of lower opportunity costs of delegation, we document an illusion effect: a trustee using non-precise promises incorrectly expects these to exert a positive effect on the trustor’s beliefs and propensity to delegate.
    Keywords: Communication, Trust, Language Precision, Delegation, Deception
    JEL: C7 C9 D9
    Date: 2019
  5. By: Blanco, M.; Dalton, Patricio (Tilburg University, Center For Economic Research)
    Abstract: This paper combines laboratory experiments with a unique feature of the city of Bogota to uncover the relationship between generosity and wealth. Bogota is divided by law into six socio-economic strata which are close proxies of household wealth and income. We recruit subjects from different strata and run a series of double-blind dictator games where the recipient is the NGO Techo-Colombia, which builds transitional housing for homeless families. We identify the stratum of each subject anonymously and blindly, and match their donations with their stratum. In a first experiment we provide a fixed endowment to all participants and nd that donations are significantly increasing with wealth. However, in a second experiment, we show that this is not because the rich are intrinsically more generous, but because the experimental endowment has lower real value for them. With endowments that are equivalent to their daily expenditures, the rich, the middle-class and the poor give a similar proportion of their stratum-equivalent endowment. Moreover, we find that the motivation to donate is similar across strata, where the generosity act is explained mainly by warm-glow rather than pure altruism.
    Keywords: charitable giving; social stratification; inequality; social preferences; dictator game
    JEL: C91 D31 D64
    Date: 2019
  6. By: Murat Iyigun (University of Colorado, Boulder); Jared Rubin (Chapman University); Avner Seror (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE, Marseille, France)
    Abstract: Why do some societies fail to adopt more efficient institutions? And why do such failures often coincide with cultural movements that glorify the past? We propose a model highlighting the interplay—or lack thereof—between institutional change and cultural beliefs. The main insight is that institutional change by itself will not lead to a more efficient economy unless culture evolves in tandem. This is because institutional change can be countered by changes in cultural values complementary to a more "traditional" economy. In our model, forward-looking elites, who benefit from a traditional, inefficient economy, may over-provide public goods that are complementary to the production of traditional goods. This encourages individuals to transmit cultural beliefs complementary to the provision of traditional goods. A horse race results between institutions, which evolve towards a more efficient (less traditional) economy, and cultural norms, which are pulled towards "tradition" by the elites. When culture wins the horse race, institutions respond by giving more political power to traditional elites—even if in doing so more efficient institutions are left behind. We call the interaction between these cultural and institutional dynamics a cultural revival.
    Keywords: institutions, cultural beliefs, cultural transmission, institutional change
    JEL: D02 N40 N70 O33 O38 O43 Z10
    Date: 2019–11
  7. By: H Peyton Young; Itai Arieli; Yakov Babichenko; Ron Peretz
    Abstract: New ways of doing things often get started through the actions of a few innovators, then diffuse rapidly as more and more people come into contact with prior adopters in their social network. Much of the literature focuses on the speed of diffusion as a function of the network topology. In practice the topology may not be known with any precision, and it is constantly in flux as links are formed and severed. Here we establish an upper bound on the expected waiting time until a given proportion of the population has adopted that holds independently of the network structure. Kreindler and Young [38, 2014] demonstrated such a bound for regular networks when agents choose between two options: the innovation and the status quo. Our bound holds for directed and undirected networks of arbitrary size and degree distribution, and for multiple competing innovations with different payoffs.
    Date: 2019–11–04

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