nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2021‒11‒15
seven papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Relational Contracts and Trust in a High-Tech Industry By Giacomo Calzolari; Leonardo Felli; Johannes Koenen; Giancarlo Spagnolo; Konrad O. Stahl
  2. Clubs and Networks By Ding, S.; Dziubinski, M.; Goyal, S.
  3. Shareholders and Stakeholders around the World: The Role of Values, Culture, and Law in Directors' Decisions By Licht, Amir N.; Adams, Renee B.
  4. Global Evidence on Misperceptions and Preferences for Redistribution By Jennifer Elena Feichtmayer; Klaus Gründler
  5. The COVID-19 Curtain: Can Past Communist Regimes Explain the Vaccination Divide in Europe By Inés Berniell; Yarine Fawaz; Anne Laferrère; Pedro Mira; Elizaveta Pronkina
  6. Optimally Targeting Interventions in Networks during a Pandemic: Theory and Evidence from the Networks of Nursing Homes in the United States By Pongou, Roland; Tchuente, Guy; Tondji, Jean-Baptiste
  7. What makes us move, what makes us stay: The role of culture in intra-EU mobility By Ekaterina Sprenger

  1. By: Giacomo Calzolari; Leonardo Felli; Johannes Koenen; Giancarlo Spagnolo; Konrad O. Stahl
    Abstract: We study how informal buyer-supplier relationships in the German automotive industry affect procurement. Using unique data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the mutual relationship, is associated with both higher quality of the automotive parts and more competition among suppliers. Yet both effects hold only for parts involving unsophisticated technology, not when technology is sophisticated. We rationalize these findings within a relational contracting model that critically focuses on changes in the bargaining power, due to differences in the costs of switching suppliers.
    Keywords: relational contracts, hold-up, buyer-supplier contracts, bargaining power
    JEL: D86 L14 L62 O34
    Date: 2021
  2. By: Ding, S.; Dziubinski, M.; Goyal, S.
    Abstract: A recurring theme in the study of society is the concentration of influence and power that is driven through unequal membership of groups and associations. In some instances these bodies constitute a small world while in others they are fragmented into distinct cliques. This paper presents a new model of clubs and networks to understand the sources of individual marginalization and the origins of different club networks. In our model, individuals seek to become members of clubs while clubs wish to have members. Club value is increasing in its size and in the strength of ties with other clubs. We show that a stable membership profile exhibits marginalization of individuals and that this is generally not welfare maximizing. Our second result shows that if returns from strength of ties are convex (concave) then stable memberships support fragmented networks with strong ties (small worlds held together by weak ties). We illustrate the value of these theoretical results through case studies of inter-locking directorates, boards of editors of journals, and defence and R&D alliances.
    Date: 2021–10–25
  3. By: Licht, Amir N.; Adams, Renee B.
    Abstract: We present evidence on the way personal and institutional factors could together guide public company directors in decision-making concerning shareholders and stakeholders. In a sample comprising more than nine hundred directors originating from over fifty countries and serving in firms from twenty three countries, we confirm that directors around the world hold a principled, quasi-ideological stance towards shareholders and stakeholders, called shareholderism, on which they vary in line with their personal values. We theorize and find that in addition to personal values, directors' shareholderism level associates with cultural norms that are conducive to entrepreneurship. Among legal factors, only creditor protection exhibits a negative correlation with shareholderism, while general legal origin and proxies for shareholder and employee protection are unrelated to it.
    Keywords: shareholderism,stakeholders,directors,values,culture,social norms,law,institutions,corporate governance,CSR,ESG,entrepreneurship
    JEL: K22 M14
    Date: 2020
  4. By: Jennifer Elena Feichtmayer; Klaus Gründler
    Abstract: Individuals often hold erroneous beliefs about their socio-economic status relative to others. We develop a new machine learning technique to measure these misperceptions and use large-scale international survey data to compute status misperception for 241,757 households from 97 countries (24 OECD, 73 non-OECD). We show that status misperception is a widespread phenomenon across the globe. Upward-biased perceptions are associated with lower preferences for redistribution and have direct consequences for welfare provision via the tax and transfer system. The effect accounts for approximately 9% of the variation in redistribution preferences, is independent of socio-demographic characteristics, robust to measurement errors in social surveys, and occurs similary when we change the underlying micro data or examine party preferences.
    Keywords: misperceptions, machine learning, socio-economic status, preferences, redistribution, welfare provision, taxes and transfers
    JEL: D31 H53 I30 C43
    Date: 2021
  5. By: Inés Berniell (CEDLAS-IIE-FCE-UNLP); Yarine Fawaz (CEMFI); Anne Laferrère (Universit´e Paris-Dauphine); Pedro Mira (CEMFI); Elizaveta Pronkina (Universit´e Paris-Dauphine)
    Abstract: As of November 2021, all former Communist countries from Central and Eastern Europe exhibit lower vaccination rates than Western European countries. Can institutional inheritance explain, at least in part, this heterogeneity in vaccination decisions across Europe? To study this question we exploit novel data from the second wave of the SHARE (Survey of Health, Ageing, and Retirement in Europe) Covid-19 Survey fielded in Summer 2021 that covers 27 European countries and Israel. First, we document lower Covid-19 vaccine take-up amongst individuals above 55 years old who were born under Communism in Europe. Next, we turn to reunified Germany to get closer to a causal effect of exposure to Iron curtain regimes. We find that exposure to the Communist regime in East Germany decreases one’s probability to get vaccinated against Covid-19 by 8 percentage points, increases that of not wanting the vaccine by 4 percentage points. Both effects are quite large and statistically significant, and they hold when controlling for individual socio-economic and demographic characteristics. We identify low social capital -measured as voluntary work, political engagement, trust in people- as a plausible channel through which past Communist regimes would still affect individuals’ preferences for Covid-19 vaccination.
    JEL: I15 I12 P36 Z18
    Date: 2020–11
  6. By: Pongou, Roland; Tchuente, Guy; Tondji, Jean-Baptiste
    Abstract: This study develops an economic model for a social planner who prioritizes health over short- term wealth accumulation during a pandemic. Agents are connected through a weighted undirected network of contacts, and the planner's objective is to determine the policy that contains the spread of infection below a tolerable incidence level, and that maximizes the present discounted value of real income, in that order of priority. The optimal unique policy depends both on the configuration of the contact network and the tolerable infection incidence. Comparative statics analyses are conducted: (i) they reveal the tradeoff between the economic cost of the pandemic and the infection incidence allowed; and (ii) they suggest a correlation between different measures of network centrality and individual lockdown probability with the correlation increasing with the tolerable infection incidence level. Using unique data on the networks of nursing and long-term homes in the U.S., we calibrate our model at the state level and estimate the tolerable COVID-19 infection incidence level. We find that laissez-faire (more tolerance to the virus spread) pandemic policy is associated with an increased number of deaths in nursing homes and higher state GDP growth. In terms of the death count, laissez-faire is more harmful to nursing homes than more peripheral in the networks, those located in deprived counties, and those who work for a profit. We also find that U.S. states with a Republican governor have a higher level of tolerable incidence, but policies tend to converge with high death count.
    Keywords: COVID-19,health-vs-wealth prioritization,economic cost,weighted networks,network centrality,nursing homes,optimally targeted lockdown policy
    JEL: D85 E61 H12 I18 J15
    Date: 2021
  7. By: Ekaterina Sprenger (ZBW – Leibniz Information Centre for Economics)
    Abstract: This article analyses the determinants of international migration flows within the European Union and specifically focuses on the role of cultural and linguistic differences in explaining the size of these flows. For that purpose, a set of indicators of cultural distance are controlled for along with economic, demographic, geographical, political and network variables using data from 28 member states of the European Union over the period 1998-2018. Economic factors play an important role in examining migration flows, but economic differentials alone may be insufficient to explain the uneven real-life migration pattern in the EU. The results suggest strong evidence of the importance of linguistic distance in explaining the direction of migration flows across the European Union.
    Keywords: European Union; Geographic Mobility; Labour Mobility; Migration; Optimum Currency Area
    JEL: J61 F22 O15
    Date: 2021–10

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