In this issue we feature 8 current papers on the theme of social capital:

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1. The Long-Term Costs of Government Surveillance: Insights from Stasi Spying in East Germany - Siegloch, Sebastian; Lichter, Andreas; Löffler, Max
2. Indirect Reciprocity, Resource Sharing, and Environmental Risk: Evidence from Field Experiments in Siberia - Drew Gerkey; E. Lance Howe; James Murphy; Colin West
3. Family and Peer Social Identity Effects on Schooling Attitudes and Performance - Norris, Jonathan
4. Identifying Peer Effects Using Gold Rushers - John Lynham
5. Coevolution of Cooperation, Preferences and Cooperative Signals in Social Dilemmas - Müller, Stephan; von Wangenheim, Georg
6. Making it right? Social norms, hand writing and cognitive skills - Guber, Raphael
7. Preferences for living in homogenous communities and cooperation: a new methodological approach combining the hedonic price model and a field experiment - Riccardo Borgoni; Giacomo Degli Antoni; Marco Faillo; Alessandra Michelangeli
8. Morale, Relationships, and Wages: An Experimental Study - Englmaier, Florian; Segal, Carmit

1. The Long-Term Costs of Government Surveillance: Insights from Stasi Spying  in East Germany

   Siegloch, Sebastian

   Lichter, Andreas

   Löffler, Max

 Based on official records from the former East German Ministry for State  Security, we quantify the long-term costs of state surveillance on social  capital and economic performance. Using county-level variation in the number  of spies in the 1980s, we exploit discontinuities at state borders to show  that higher levels of government surveillance led to lower levels of  interpersonal and institutional trust in post-reunification Germany. Based on  a second identification strategy that accounts for county fixed effects we  further estimate the economic costs of spying. We find that a more intense  surveillance caused lower self-employment rates, fewer patents per capita,  higher unemployment rates and larger population losses throughout the 1990s  and 2000s. Overall, our results suggest that the social and economic costs of  East German state surveillance are large and persistent.

   JEL: H11 N34 P26

URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145656&r=soc

2. Indirect Reciprocity, Resource Sharing, and Environmental Risk: Evidence from Field Experiments in Siberia

   Drew Gerkey

   E. Lance Howe

   James Murphy

   Colin West

 Integrating information from existing research, qualitative ethnographic  interviews, and participant observation, we designed a field experiment that  introduces idiosyncratic environmental risk and a voluntary sharing decision  into a standard public goods game. Conducted with subsistence resource users  in rural villages on the Kamchatka Peninsula in Northeast Siberia, we find  evidence consistent with a model of indirect reciprocity and local social  norms of helping the needy. When participants are allowed to develop  reputations in the experiments, as is the case in most small-scale societies,  we find that sharing is increasingly directed toward individuals experiencing  hardship, good reputations increase aid, and the pooling of resources through  voluntary sharing becomes more effective. We also find high levels of  voluntary sharing without a strong commitment device; however, this form of  cooperation does not increase contributions to the public good. Our results  are consistent with previous experiments and theoretical models, suggesting  strategic risks tied to rewards, punishments, and reputations are important.

 However, unlike studies that focus solely on strategic risks, we find the  effects of rewards, punishments, and reputations are altered by the presence  of environmental factors. Unexpected changes in resource abundance increase  interdependence and may alter the costs and benefits of cooperation, relative  to defection. We suggest environmental factors that increase interdependence  are critically important to consider when developing and testing theories of  cooperation.

URL: http://d.repec.org/n?u=RePEc:feb:framed:00596&r=soc

3. Family and Peer Social Identity Effects on Schooling Attitudes and Performance

   Norris, Jonathan (University of North Carolina at Greensboro, Department of

    Economics)

 An adolescent’s family and peers, impart incentives on education through  social identity shaping attitudes about school and performance. I model  identity related mechanisms from family and peer ideals about education in a  network model of adolescent effort in school and link it empirically with  spatial econometrics. Both groups influence attitudes and changes in family  ideals create spill-overs in attitudes. Attitudes impact performance in  school, and changes in attitudes influence performance over the network. us,  targeting family and peer ideals and attitudes about school can positively  impact an adolescent’s educational traits and outcomes; effects that in turn  ripple across a school.

   Keywords: Identity Economics; Peer Effects; Spatial Econometrics; Friendship Network

   JEL: C21 I21 J13 Z13

URL: http://d.repec.org/n?u=RePEc:ris:uncgec:2017_001&r=soc

4. Identifying Peer Effects Using Gold Rushers

   John Lynham (University of Hawaii at Manoa, Department of Economics;

    University of Hawaii Economic Research Organization)  Fishers pay attention to where other fishers are fishing, suggesting the  potential for peer effects. But peer effects are difficult to identify  without an exogenous shifter of peer group membership. We propose an  identification strategy that exploits a shifter of peer group membership:

 gold rushes of new entrants. Following an exchange-rate-induced gold rush in  an American fishery, we find that new entrants are strongly influenced by the  location choices of their peers. Over-identification tests suggest that the  assumptions underlying identification hold when new entrants are  inexperienced but identification is lost as new entrants start to potentially  influence their peers.

   Keywords: Peer Effects, Gold Rushes, Resource Extraction

   JEL: J0 Q0 D8

URL: http://d.repec.org/n?u=RePEc:hae:wpaper:2016-15&r=soc

5. Coevolution of Cooperation, Preferences and Cooperative Signals in Social Dilemmas.

   Müller, Stephan

   von Wangenheim, Georg

 We study the coevolution of cooperation, preferences and cooperative signals  in an environment where individuals engage in a signaling-extended Prisoner's  Dilemma. We identify a new type of evolutionary equilibrium -- a transitional  equilibrium -- which is constituted and stabilized by the dynamic interaction  of multiple Bayesian equilibria. A transitional equilibrium: (1) exists under  mild conditions and (2) can stabilize a population that is characterized by  the heterogeneity of behavior, preferences, and signaling. We thereby offer  an explanation for persistent regularities observed in laboratory and field  data on cooperative behavior. Furthermore, this type of equilibria is least  demanding with respect to differences in signaling cost between `conditional  cooperators' and `opportunists'. Indeed and quite surprisingly, a  transitional equilibrium is consistent with `conditional cooperators' bearing  higher signaling cost in terms of fitness than `opportunists'.

   JEL: C73 D64 D82

URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145713&r=soc

6. Making it right? Social norms, hand writing and cognitive skills

   Guber, Raphael

 Forcing a left-handed child to use the right hand for writing was long common  practice in the Western world. Although it is rare now in these societies, it  is still highly prevalent in developing countries and across various  cultures. Forced right-hand writing is a rare early childhood intervention  that was performed on a large scale and throughout history. In this paper we  investigate how this intervention affected educational outcomes and cognitive  skills in German adults in the mid and long run. To identify causal effects  we use the decline of the right-hand writing norm across cohorts in a  difference-in-differences first stage, where right-handers serve as  counterfactual group. While OLS estimates indicate that treated individuals  obtained more years of education and better math grades (compared to all  others), our 2SLS coefficients suggest zero or negative effects for  educational outcomes, and strong negative effects on cognitive skills. These  findings are in line with brain scans that show reduced gray matter in the  putamen of switched German adults, which is responsible for motor skills and  cognitive functioning.

   JEL: J24 I10 I21

URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145597&r=soc

7. Preferences for living in homogenous communities and cooperation: a new methodological approach combining the hedonic price model and a field experiment§

   Riccardo Borgoni (DEMS - University of Milan-Bicocca)

   Giacomo Degli Antoni (University of Parma, Department of Law)

   Marco Faillo (University of Trento)

   Alessandra Michelangeli (DEMS - University of Milan-Bicocca)  The literature on the hedonic price approach applied to housing highlights  the existence of natives’ preferences against living in high-dense  immigrant urban areas. At the same time, empirical and experimental evidence  show that ethnic fragmentation reduces cooperation at the community level.

 Mainly because of the difficulty to measure cooperation at the level of  neighborhood, the correlation between these two phenomena is still largely  unexplored. In this paper, we propose to investigate this issue by combining  the hedonic price approach and a framed field experiment that allows us to  collect a measure of cooperation at the neighborhood level. We show how this  methodology may be implemented by carrying out a pilot study for the city of  Milan. The purpose is to pave the way for further research aiming at  disentangling between alternative explanations of natives’ preferences for  living in homogeneous communities.

   Keywords: Cooperative behavior; framed field experiment, revealed preferences

   JEL: C93 J15 R10 R21

URL: http://d.repec.org/n?u=RePEc:ent:wpaper:wp62&r=soc

8. Morale, Relationships, and Wages: An Experimental Study

   Englmaier, Florian

   Segal, Carmit

 Many labor relations are characterized by the possibility of repeated  interaction without long term contracts and with discretionary pay  components. We implement such a structure in the lab by allowing workers and  firms to interact repeatedly for many periods absent a pre-announced final  period. In this setting persistent and different human resource practices  emerge endogenously: we find (long-term) relationships characterized by  generous surplus sharing and spot-interactions with little to no rent for the  workers. Efficiency, i.e. exerted effort, is comparable across these two  institutions. Hence, spot-interactions are at least as profitable for firms  engaging in such relationships. In control treatments, we show that neither  limited firm commitment nor structural unemployment alone is sufficient to  generate these patterns. Analyzing individual level data, we document that  firm and worker behavior are individually rational and that individual  histories play a significant role in explaining the observed behavior.

   JEL: C91 D21 M50

URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145662&r=soc

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