nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2020‒01‒27
eleven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Walls of Glass: Measuring Deprivation in Social Participation By Nicolai Suppa
  2. Becoming Friends or Foes? How Competitive Environments Shape Social Preferences By Eugen Dimant; Kyle Hyndman
  3. The Surprising Capacity of the Company You Keep: Revealing Group Cohesion as a Powerful Factor of Team Production By Simon Gaechter; Chris Starmer; Fabio Tufano
  4. The “same bed, different dreams” of Vietnam and China: how (mis)trust could make or break it By Nguyen, Hong-Kong T.; Vuong, Quan-Hoang; Ho, Tung Manh; Vuong, Thu-Trang
  5. Reciprocity and the Interaction between the Unemployed and the Caseworker By van den Berg, Gerard J.; Kesternich, Iris; Müller, Gerrit; Siflinger, Bettina M.
  6. Trust, Trustworthiness, and the Behavioral Foundations of Corporate Law By Blair, Margaret M; Stout, Lynn; Library, Cornell
  7. Media Bias and Tax Compliance: Experimental Evidence By Miloš Fišar; Tommaso Reggiani; Fabio Sabatini; Jiří Špalek
  8. Norms, Enforcement, and Tax Evasion By Anders Jensen
  9. Fear and Loathing on the Campaign Trail: Did Immigration Cause Brexit? By Max Viskanic
  10. Perceived Immigration and Voting Behavior By Davide Bellucci; Pierluigi Conzo; Roberto Zotti
  11. Making Friends Meet: Network Formation with Introductions By Jan-Peter Siedlarek

  1. 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 often 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 survey data for Germany 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.
    Date: 2018–03
  2. By: Eugen Dimant (University of Pennsylvania); Kyle Hyndman (University of Texas Dallas)
    Abstract: We study the interaction between competition and social proximity on altruism, trust, and reciprocity. We decompose the behavioral channels by utilizing variants of both the Trust Game and the Dictator Game in a design that systematically controls the transmission of relevant information. Our results suggest that competitive environments, and in particular the outcomes thereof when competitors are socially proximate, affect social preferences. Within the context of the Trust Game, we find that winning makes individuals more trusting, less reciprocal, and less altruistic. In order to decompose the underlying mechanism of decision-makers, we subsequently use the Dictator Game and find that knowledge about winning the competition decreases giving, especially with increased proximity between competitors. From this we can conclude that the observed increase in trust is guided by self-serving concerns to maximize the total pie rather than altruistic concerns to compensate the competitor who lost the competition. Our results provide helpful insights into the structure of incentives within institutions and companies, which is known to affect performance.
    Keywords: Altruism, Competition, Reciprocity, Social Proximity, Trust
    Date: 2019
  3. By: Simon Gaechter (University of Nottingham); Chris Starmer (University of Nottingham); Fabio Tufano (University of Nottingham)
    Abstract: We introduce the concept of “group cohesion†to study the economic consequences of social relationships in team production. We measure group cohesion, adapting the “oneness scale†from psychology to group level. A series of experiments, including a pre-registered replication, reveals that higher cohesion groups are more likely to achieve Pareto-superior outcomes in weak-link coordination games. Judged against benchmarks, the effects of cohesion are economically large. We identify beliefs rather than social preferences as a primary mechanism explaining the effects of cohesion. Our comprehensive evidence establishes group cohesion as a powerful production factor and a useful new tool of economic research.
    Keywords: Group Cohesion, Oneness
    Date: 2019
  4. By: Nguyen, Hong-Kong T.; Vuong, Quan-Hoang; Ho, Tung Manh; Vuong, Thu-Trang
    Abstract: The relationship between Vietnam and China could be captured in the Chinese expression of “同床异梦”, which means lying on the same bed but having different dreams. The two countries share certain cultural and political similarities but also diverge vastly in their national interests. This paper adds to the extant literature on this topic by analyzing the element of trust/mistrust in their interactions in trade-investment, tourism, and defense-security. The analysis shows how the relationship is increasingly interdependent but is equally fragile due to the lack of trust on both sides. The mistrust or even distrust of Chinese subjects run deep within the Vietnamese mindset, from the skepticism of Chinese investment, Chinese tourists, discrimination against ethnic Chinese, to the caution against Chinese aggression in the South China Sea. The paper forecasts that, despite the deep-seated differences and occasional mistrust, going forward, neither side would risk damaging the status quo even when tensions peak.
    Date: 2018–05–25
  5. By: van den Berg, Gerard J. (University of Bristol); Kesternich, Iris (University of Munich); Müller, Gerrit (Institute for Employment Research (IAB), Nuremberg); Siflinger, Bettina M. (Tilburg University)
    Abstract: We investigate how negatively reciprocal traits of unemployed individuals interact with "sticks" policies imposing constraints on individual job search effort in the context of the German welfare system. For this we merge survey data of long-term unemployed individuals, containing indicators of reciprocity as a personality trait, to a unique set of register data on all unemployed coached by the same team of caseworkers and their treatments. We find that the combination of a higher negative reciprocity and a stricter regime have a negative interaction effect on search effort exerted by the unemployed. The results are stronger for males than for females. Stricter regimes may therefore drive long-term unemployed males with certain types of social preferences further away from the labor market.
    Keywords: behavioral response, active labor market policy, monitoring, welfare, job search
    JEL: J16 J24 N44 D90 J64
    Date: 2019–12
  6. By: Blair, Margaret M; Stout, Lynn; Library, Cornell
    Abstract: 149 University of Pennsylvania Law Review 1735 (2001) Conventional legal and economic analysis assumes that opportunistic behavior is discouraged and that cooperation is encouraged within firms primarily through the use of legal and market incentives. This presumption is embedded in the modern view that the corporation is best described as a "nexus of contracts, " a collection of explicit and implicit agreements voluntarily negotiated among the rationally selfish parties who join in the corporate enterprise. In this Article we take a different approach. We start from the observation that, in many circumstances, legal and market sanctions provide, at best, imperfect means of regulating behavior within the firm. We consider an alternate hypothesis: that corporate participants often cooperate with each other not because of external constraints but because of internal ones. In particular, we argue that the behavioral phenomena of internalized trust and trustworthiness play important roles in encouraging cooperation within films. In support of this claim, we survey the extensive experimental evidence that has been produced over the past four decades on human behavior in "social dilemmas." This evidence demonstrates that internalized trust is a common phenomenon, that it is at least in part learned rather than innate, and that different individuals vary in their inclinations toward trust. Most importantly, the experimental evidence indicates that decisions whether or not to trust others are in large part determined by social context rather than external payoffs. By altering social con text-subjects' perceptions of others' beliefs, expectations, likely actions, and relationships to themselves-experimenters can reliably produce in subjects in social dilemmas everything from nearly universal trust to an almost complete absence of trust. In other words, most people behave as if they have two personalities or preference functions. One is competitive and self-regarding. The other is cooperative and other-regarding. Social framing is key in triggering when the cooperative personality emerges. These behavioral findings carry important implications for corporate law. For example, in this Article we demonstrate first that the phenomenon of trust offers insight into the substantive structure of corporate law and particularly into the nature and purpose of that elusive legal concept, fiduciary duty. Second, the experimental evidence on trust sheds light on how corporate law works, by suggesting that judicial opinions in corporate cases influence corporate office' and directors' behavior not only by altering their external incentives but also by changing their internalized preferences. This possibility helps explain the notoriously puzzling relationship between the duty of care and the business judgment rule. Third, trust highlights the limits of law by explaining how cooperative patterns of behavior can sometimes develop within firms even when external incentives, such as legal sanctions, are unavailable or ineffective. In the process, it underscores the dangers of the contractarian approach by suggesting that an excessive emphasis on external sanctions - including formal contract and even the rhetoric of contract - may be not only ineffective but counterproductive, serving to undermine trust and trustworthiness within the firm.
    Date: 2018–04–15
  7. By: Miloš Fišar (Vienna University of Economics and Business & Masaryk University); Tommaso Reggiani (Cardiff University, Masaryk University & IZA); Fabio Sabatini (Sapienza University of Rome & IZA); Jiří Špalek (Masaryk University)
    Abstract: We study the impact of media bias on tax compliance. Through a framed laboratory experiment, we assess how the exposure to biased news about government action affects compliance in a repeated taxation game. Subjects treated with positive news are significantly more compliant than the control group. The exposure to negative news, instead, does not prompt any significant reaction in respect to the neutral condition, suggesting that participants perceive the media negativity bias in the selection and tonality of news as the norm rather than the exception. Overall, our results suggest that biased news act as a constant source of psychological priming and play a vital role in taxpayers' compliance decisions.
    Keywords: Tax compliance, media bias, taxation game, laboratory experiment.
    JEL: C91 D70 H26 H31
    Date: 2020–01–23
  8. By: Anders Jensen
    Abstract: This paper studies individual and social motives in tax evasion. We build a simple dynamic model that incorporates these motives and their interaction. The social motives underpin the role of norms and is the source of the dynamics that we study. Our empirical analysis exploits the adoption in 1990 of a poll tax to fund local government in the UK, which led to widespread evasion. The evidence is consistent with the model’s main predictions on the dynamics of evasion.
    Keywords: Tax Evasion
    Date: 2019–09
  9. By: Max Viskanic (Sciences Po)
    Abstract: Can large immigration inflows impact electoral outcomes and specifically, what impact did immigration have on the vote in favour of leaving the European Union (Brexit) in the United Kingdom? In particular, I focus on how the increase in Polish immigration, the major group of immigrants post 2004, affected votes in favour of leaving the EU. I find a percentage point increase in Polish immigration to the UK to have caused an increase in votes in favour of Brexit of about 2.72-3.12 percentage points, depending on the specification. To obtain exogenous variation in Polish immigration, I collect data from the archives that reveals the location of Polish War Resettlement Camps after Word War II, which location is plausibly exogenous to current political outcomes. Discussing potential mechanisms, I examine public opinion data in the British Election Study 2015 and find evidence of adversity towards immigration to be a root cause. Other considerations such as the National Health Service (NHS), incumbency and the general trust in politicians as well as the political institutions seem not to play a role.
    Keywords: Political Economy; Voting; Migration; Brexit; EU; UK
    Date: 2020–01
  10. By: Davide Bellucci; Pierluigi Conzo; Roberto Zotti
    Abstract: A growing number of studies have found significant effects of inflows of migrants on electoral outcomes. However, the role of perceived immigration, which in many European countries is above official migration statistics, is overlooked. This paper investigates the effects of perceived threat of immigration on voting behavior, by looking at whether local elections in Italy were affected by sea arrivals of refugees before the election day. While, upon arrival, refugees cannot freely go to the destination municipality, landing episodes were discussed in the media especially before the elections, thereby influencing voters’ perceptions about the arrivals. We develop an index of exposure to arrivals that varies over time and across municipalities depending on the nationality of the incoming refugees. This index captures the impact of perceived immigration on voting behavior, on top of the effects of real immigration as proxied for by the stock of immigrants and the presence of refugee centers. Results show that, in municipalities where refugees are more expected to arrive, participation decreases, whereas protest votes and support for extreme-right, populist and anti-immigration parties increase. Since these effects are driven by areas with fast broadband availability, we argue that anti-immigration campaigns played a key role.
    Keywords: Immigration; Voting; Political Economy; Populism; Electoral campaigns; Media exposure.
    JEL: D62 P16 J61
    Date: 2019
  11. By: Jan-Peter Siedlarek
    Abstract: High levels of clustering—the tendency for two nodes in a network to share a neighbor—are ubiquitous in economic and social networks across different applications. In addition, many real-world networks show high payoffs for nodes that connect otherwise separate network regions, representing rewards for filling “structural holes” in the sense of Burt (1992) and keeping distances in networks short. This paper proposes a parsimonious model of network formation with introductions and intermediation rents that can explain both these features. Introductions make it cheaper to create connections that share a common node. They are subject to a tradeoff between gains from shorter connections with lower search cost and losses from lower intermediation rents for the central node. Stable networks are shown to have high levels of clustering at the same time that they permit substantial intermediation rents for nodes bridging structural holes.
    Keywords: networks; network formation; clustering; intermediation; introductions
    JEL: A14 D85
    Date: 2020–01–15

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