nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2022‒08‒22
six papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Fake News in Social Networks By Christoph Aymanns; Jakob Foerster; Co-Pierre Georg; Matthias Weber
  2. How costly are cultural biases? By D'Acunto, Francesco; Ghosh, Pulak; Jain, Rajiv; Rossi, Alberto G.
  3. Trust and contracts: Empirical evidence By D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan
  4. Legitimize through Endorsement By Andrea Gallice; Edoardo Grillo
  5. The influence of social interactions on innovative endeavors in online communities By Resch, Christian
  6. Stigma in Welfare Programs By Celhay, Pablo; Meyer, Bruce D.; Mittag, Nikolas

  1. By: Christoph Aymanns (London School of Economics & Political Science (LSE) - London School of Economics; University of St. Gallen - School of Finance); Jakob Foerster (University of Oxford); Co-Pierre Georg (University of Cape Town; Deutsche Bundesbank); Matthias Weber (University of St. Gallen - School of Finance; Swiss Finance Institute)
    Abstract: We propose multi-agent reinforcement learning as a new method for modeling fake news in social networks. This method allows us to model human behavior in social networks both in unaccustomed populations and in populations that have adapted to the presence of fake news. In particular the latter is challenging for existing methods. We find that a fake-news attack is more effective if it targets highly connected people and people with weaker private information. Attacks are more effective when the disinformation is spread across several agents than when the disinformation is concentrated with more intensity on fewer agents. Furthermore, fake news spread less well in balanced networks than in clustered networks. We test a part of these findings in a human-subject experiment. The experimental evidence provides support for the predictions from the model. This suggests that our model is suitable to analyze the spread of fake news in social networks.
    Date: 2022–07
  2. By: D'Acunto, Francesco; Ghosh, Pulak; Jain, Rajiv; Rossi, Alberto G.
    Abstract: We estimate the cost of cultural biases in high-stake economic decisions by comparing agents' peer-to-peer lending choices with those the same agents make under the assistance of an automated robo-advisor. We first confirm substantial in-group vs. out-group and stereotypical discrimination, which are stronger for lenders who reside where historical cultural biases are higher. We then exploit our unique setting to document that cultural biases are costly: agents face 8% higher default rates on favored-group borrowers when unassisted. The returns they earn on favored groups increase by 7.3 percentage points when assisted. The high riskiness of the marginal borrowers from favorite groups largely explains the bad performance of culturally-biased choices. Because varying economic incentives do not reduce agents' biases, inaccurate statistical discrimination-unconscious biased beliefs about borrowers' quality-can explain our results better than taste-based discrimination.
    Keywords: Trust,Social Capital,Discrimination,Cultural Norms,Robo-Advising,Biased Beliefs,Inter-ethnic Conflict,Social Conditioning,Religion,Caste
    Date: 2022
  3. By: D'Acunto, Francesco; Xie, Jin; Yao, Jiaquan
    Abstract: Trust between parties should drive contract design: if parties were suspicious about each others' reaction to unplanned events, they might agree to pay higher costs of negotiation ex ante to complete contracts. Using a unique sample of U.S. consulting contracts and a negative shock to trust between shareholders/managers (principals) and consultants (agents) staggered across space and over time, we find that lower trust increases contract completeness. Not only the complexity but also the verifiable states of the world covered by contracts increase after trust drops. The results hold for several novel text-analysis-based measures of contract completeness and do not arise in falsification tests. At the clause level, we find that non-compete agreements, confidentiality, indemnification, and termination rules are the most likely clauses added to contracts after a negative shock to trust and these additions are not driven by new boilerplate contract templates. These clauses are those whose presence should be sensitive to the mutual trust between principals and agents.
    Keywords: Empirical Contract Theory,Incomplete Contracts,Cultural Economics,Beliefs and Choice,Personnel Economics,Organizational Economics,FinTech andTextual Analysis,Consulting,Management,Non-Compete Agreements,Big Five,Fraud,Accounting,Disclosure
    JEL: D86 D91 J33 L14 Z10
    Date: 2022
  4. By: Andrea Gallice; Edoardo Grillo
    Abstract: Individuals dier in their propensity to violate social norms. Over time, the propensity of some individuals to violate these norms may change in response to socioeconomic shocks. When these changes are not publicly observable, norm abidance may remain high because individuals fear social costs. We study how an opinion leader who is privately informed about the direction and size of the societal change can boost or hinder the abidance by a social norm. We show that the opinion leader can impact individuals' behavior when she is neither too ideologically sided in favor of the norm violation, nor too concerned about her popularity. The impact of the opinion leader is stronger when social concerns are an important driver of individuals' behavior, the uncertainty concerning the deepness of the societal change is high, and citizens interact more often with like- minded individuals.
    Keywords: Social norms; societal change; opinion leaders; endorsements; legitimization
    Date: 2022
  5. By: Resch, Christian
    Abstract: Online communities offer great potential for sourcing future innovations. While organizations search for inspiration and innovations outside their organizational boundaries to stay competitive, individuals innovate to solve their own needs and subsequently freely reveal these innovations. Online communities constitute a virtual space for individuals to share ideas, socially interact, collaborate, and build on others’ ideas. In this dissertation, I investigate how these social interactions influence the generation of ideas and the ongoing idea development in online communities. The three studies of this dissertation use two unique large datasets that allowed the investigation of social interactions and their contents. In doing so, topic modeling and social network analysis techniques build the methodical foundation to measure latent content representations of the information that is exchanged in online communities. Regarding the generation of new ideas, this dissertation includes two empirical studies that focus on the content that individuals access through their social peers. The first study reveals that the combination of redundant and non-redundant information favors idea newness. In particular, brokers accessing diverse social information benefit from redundant content for generating new ideas. In contrast, non-redundant contents have detrimental effects on brokers’ social non- redundancy regarding brokers’ idea newness. The second study takes a time-dependent view on social interactions and finds that a temporal separation between inspiration and focus on specific contents leads to more innovative outcomes of individuals engaging and innovating in online communities. By focusing on the ongoing collaborative idea development process in online communities, the third study investigates how social influences shape the trajectory ideas take after they got initially shared. The findings of the third study show that social impact theory helps explain how social influences affect the development directions of ideas in online communities. By taking different perspectives on innovative endeavors in online communities, this dissertation contributes to the literature on online communities, social networks, and user innovation. Specifically, this dissertation emphasizes the importance of social interactions for innovations and this relationships’ dependence on the actual content, timing, and social impact of social interactions.
    Date: 2022
  6. By: Celhay, Pablo (Pontificia Universidad Catolica de Chile); Meyer, Bruce D. (University of Chicago); Mittag, Nikolas (CERGE-EI)
    Abstract: Stigma of welfare participation is important for policy and survey design, because it deters program take-up and increases misreporting. Stigma is also relevant to the literature on social image concerns, yet empirical evidence is scant because stigma is difficult to empirically identify. We use a novel approach to studying stigma by examining the relationship between program participation in a recipient's local network and underreporting program participation in surveys. We find a robust negative relationship and rule out explanations other than stigma. Stigma decreases when more peers engage in the stigmatized behavior and when such actions are less observable.
    Keywords: welfare stigma, program participation, social networks, social image, peer effects
    JEL: D19 D85 D91 I38 Z13
    Date: 2022–07

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