nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2022‒10‒03
six papers chosen by
Fabio Sabatini
Università degli Studi di Roma “La Sapienza”

  1. Measuring "Group Cohesion" to Reveal the Power of Social Relationships in Team Production By Gächter, Simon; Starmer, Chris; Tufano, Fabio
  2. Trust and Saving in Financial Institutions by the Poor By Sebastian Galiani; Peter Gertler; Camila Navajas Ahumada
  3. Stress, Ethnicity, and Prosocial Behavior By Johannes Haushofer; Sara Lowes; Abednego Musau; David M. Ndetei; Nathan Nunn; Moritz Poll; Nancy Qian
  4. Connecting to power: political connections, innovation, and firm dynamics By Ufuk Akcigit; Salomé Baslandze; Francesca Lotti
  5. What drives trust in the financial sector supervisor? New empirical evidence By Carin van der Cruijsen; Maurice Doll; Jakob de Haan
  6. The impact of providing information about the ECB's instruments on inflation expectations and trust in the ECB. Experimental evidence By Nils Brouwer; Jakob de Haan

  1. By: Gächter, Simon (University of Nottingham); Starmer, Chris (University of Nottingham); Tufano, Fabio (University of Nottingham)
    Abstract: We introduce "group cohesion" to study the economic relevance of social relationships in team production. We operationalize measurement of group cohesion, adapting the "oneness scale" from psychology. A series of experiments, including a pre-registered replication, reveals strong positive associations between group cohesion and performance assessed in weak-link coordination games, with high-cohesion groups being very likely to achieve superior equilibria. In exploratory analysis, we identify beliefs rather than social preferences as the primary mechanism through which factors proxied by group cohesion influence group performance. Our evidence provides proof-of-concept for group cohesion as a useful tool for economic research and practice.
    Keywords: social relationships, group cohesion, oneness, coordination, weak-link game, experiments, real groups
    JEL: C92 D91
    Date: 2022–08
  2. By: Sebastian Galiani (University of Maryland/NBER); Peter Gertler (University of California, Berkeley/NBER); Camila Navajas Ahumada (Universidad Torcuato Di Tella)
    Abstract: We randomly assigned beneficiaries of a conditional cash transfer program in Peru to attend a 3 hour training session designed to build their trust in financial institutions.We find that the intervention: (a) increased trust in banks, but had no effect on financial literacy, and (b) increased savings over a ten month period. The increase insavings represents a 1.4 percentage point increase in the savings rate out of the cash transfer deposits, and a 0.4 percentage point increase in the savings rate out of household income.
    Keywords: Trust, savings and poverty
    JEL: G20 D14 I30
    Date: 2022–09
  3. By: Johannes Haushofer; Sara Lowes; Abednego Musau; David M. Ndetei; Nathan Nunn; Moritz Poll; Nancy Qian
    Abstract: While observational evidence suggests that people behave more prosocially towards members of their own ethnic group, many laboratory studies fail to find this effect. One possible explanation is that coethnic preference only emerges during times of stress. To test this hypothesis, we pharmacologically increase levels of the stress hormone cortisol, after which participants complete laboratory experiments with coethnics and noncoethnics. We find mixed evidence that increased cortisol decreases prosocial behavior. Coethnic preferences do not vary with cortisol. However, in contrast to previous studies, we find strong and robust evidence of coethnic preference.
    JEL: O12 Z10
    Date: 2022–08
  4. By: Ufuk Akcigit (University of Chicago); Salomé Baslandze (Federal Reserve Bank of Atlanta); Francesca Lotti (Bank of Italy)
    Abstract: How do political connections affect firm dynamics, innovation, and creative destruction? We extend a Schumpeterian growth model with political connections that help firms ease their bureaucratic and regulatory burden. The model highlights how political connections influence an economy's business dynamism and innovation, and generate a number of implications guiding our empirical analysis. We construct a new large-scale dataset, for the period 1993-2014, on the universe of firms, workers, and politicians, supplemented by corporate financial statements, patent and election data, so as to define connected firms as those employing local politicians. We identify a leadership paradox: market leaders are much more likely to be politically connected, but much less likely to innovate. Political connections relate to a higher rate of survival, as well as growth in employment and revenues, but not in productivity. This result was also confirmed using the regression discontinuity design. At the aggregate level, gains from political connections do not offset losses stemming from lower reallocation and growth.
    Keywords: firm dynamics, innovation, political connections, creative destruction, productivity
    JEL: O3 O4 D7
    Date: 2022–07
  5. By: Carin van der Cruijsen; Maurice Doll; Jakob de Haan
    Abstract: Abstract: Using a survey among more than 2,000 consumers in the Netherlands, we examine the drivers of trust in the financial sector supervisor. Trust in De Nederlandsche Bank (DNB) declined sharply during the financial crisis and has not yet completely recovered. Our results suggest that consumers’ knowledge about supervision is positively associated with their trust in the supervisor. Assessing the fitness and propriety of top managers of financial institutions and supervising financial institutions enlarge trust in DNB. The same holds for the execution of the deposit guarantee system. Finally, we find that communicating about supervisory activities also increases trust.
    Keywords: Trust; financial sector supervisor; financial literacy; communication
    JEL: D12 D84 E58 G21
    Date: 2022–09
  6. By: Nils Brouwer; Jakob de Haan
    Abstract: We use a random controlled trial among Dutch households to analyze whether communication about monetary policy instruments impacts inflation expectations and trust in the ECB. All participants in the survey receive information about the ECB's goal, but only a subset also receives information about how the ECB tries to achieve this. Our results suggest that individuals who are informed about policy instruments have inflation expectations closer to the ECB's target inflation than individuals who only receive information about the ECB's objective. Our evidence also indicates that communication about the ECB's instruments does not impact average trust in the ECB.
    Keywords: central bank; communication; general public; trust; RCT
    JEL: D12 D84 E52 E58
    Date: 2021–03

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