Date:

2015-02

By:

Andrea Tesei

Existing studies of trust formation in U.S. metropolitan areas have found that trust is lower when there is more income inequality and greater racial fragmentation. I add to this literature by examining the role of income inequality between racial groups (racial income inequality). I find that greater racial income inequality reduces trust. Also, racial fragmentation is no longer a significant determinant of trust once racial income inequality is accounted for. I also show that racial income inequality has a more detrimental effect in more racially fragmented communities and that trust falls more in minority groups when racial income inequality increases. The results hold under both least squares and instrumental variable estimation.

Keywords:

Trust, racial income inequality, U.S.

JEL:

D31 Z10 J15

URL:

http://d.repec.org/n?u=RePEc:cep:cepdps:dp1331&r=soc

Date:

2015-11-02

By:

Ritwik Banerjee (Department of Economics and Business, Aarhus University, Denmark)

The paper studies the interplay between corruption and social trust, using data from a lab experiment. Subjects play either a harassment bribery game or a strategically identical but differently framed ultimatum game, followed by a trust game. In the second phase, the trust game is followed by the bribery game. We also use the design to study the association between behavior in trust game and response to the World Value Survey trust question. Our results show that a) there is a negative spillover effect of corruption on trust, but not vice-versa, and the effect increases with a decrease in social appropriateness norm of the bribe demand; b) lower trust in the bribery game treatment is explained by lower expected return on trust; c) surprisingly, for both the treatments, social appropriateness norm violation engenders the decay in trust through its adverse effect on belief about trustworthiness; d) the WVS-trust question captures expectations about others’ trustworthiness, however, response to the WVS-trust is stable while behavior in the trust game is susceptible to short term fluctuations.

Keywords:

Corruption, Social Capital, Social Norm, Trust Games

JEL:

C91 C92 D03

URL:

http://d.repec.org/n?u=RePEc:aah:aarhec:2015-05&r=soc

Date:

2014

By:

Haliassos, Michael

Neither Northerners are willing to invest in a South they perceive as unwilling to undertake necessary structural reforms, nor are Southerners willing to invest in their countries in a climate of austerity and policy uncertainty imposed, in their view, by the North. This results in a vicious cycle of mistrust. However, as the author argues, big steps in the direction of reforms may provide just enough thrust to break out of this vicious cycle, propel southern countries - and especially Greece - to a much happier future, and promote the chances for more balanced economic performance in North and South.

Keywords:

fiscal crisis,household liquidity,economic reforms,Greece

URL:

http://d.repec.org/n?u=RePEc:zbw:safepl:25&r=soc

Date:

2010-05-07

By:

Griffiths, Barry

It is difficult to identify acts that are purely altruistic, and do not have some level of egoism or self-interest involved. By considering situations where team members seemingly have nothing to gain by the way they distribute points to others with regard to peer evaluation, and where their acts of giving are anonymous, can never be verified, and cannot guarantee reciprocity, we see that there is still significant evidence of altruism, which we then confirm using laboratory experiments.

Keywords:

Altruism, individual behavior, group behavior, laboratory experiments, reciprocity

JEL:

A13 C91 C92 D03 D63 D64 D71

URL:

http://d.repec.org/n?u=RePEc:pra:mprapa:62208&r=soc

Date:

2014-01-15

By:

Paolo Falco ; Stefano A. Caria

We conduct a field experiment to investigate employers' trust in workers.  A sample of real entrepreneurs and workers from urban Ghana are respectively assigned to the roles of employers and employees.  Employers have the option to hire (trust) an employee, who can in turn choose whether to exert effort (trustworthiness) in the real-effort task.  By comparing employers' expectations to workers' revealed trustworthiness, we are able to detect potential misperceptions leading to sub-optimal hiring.  We further devise two randomized treatments to test for the existence of expectation bias against specific workers categories and estimate the elasticity of employers' beliefs with respect to new information.  We find that employers significantly underestimate workers' trustworthiness and this reduces their profit.  Employees are aware of employers' sub-optimal trust.  Expectations are largely inelastic with respect to news and negative signals have a strong (downward) effect than positive ones.  Our results suggest that raising employers' expectations would have a strong impact on hiring.

Keywords:

trust, trustworthiness, expectations, effort, hiring, microenterprise, learning, discrimination, experiment, African labour markets

JEL:

J23 J71 O15 C9

URL:

http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2014-07&r=soc

Date:

2014-12

By:

Idrissa Diabate (INSTAT, Mali) ; Sandrine Mesplé-Somps (IRD, UMR DIAL, PSL, Université Paris-Dauphine)

In this paper, we investigate how powerful a mechanism migration is in the transmission of social norms, taking Mali and Female Genital Mutilation (FGM) as a case study. Mali has a strong FGM culture and a long-standing history of migration. We use an original household-level database coupled with census data to analyze the extent to which girls living in villages with high rates of return migrants are less prone to FGM. Malians migrate predominantly to other African countries where female circumcision is uncommon (e.g. Côte d’Ivoire) and to countries where FGM is totally banned (France and other developed countries) and where anti-FGM information campaigns frequently target African migrants. Taking a two-step instrumental variable approach to control for the endogeneity of migration decisions, we show that return migrants have a negative and significant influence on FGM. We also show that adults living in villages with return migrants are more in favor of legislation against FGM.________________________________ Dans cet article, nous examinons dans quelle mesure la migration est un vecteur de transferts de normes sociales en étudiant le lien entre migration et excision au Mali. Alors que l’excision est fortement répandue au Mali, ce pays a une forte tradition migratoire vers les pays limitrophes et les pays du Nord où l’excision est soit moins pratiquée soit sanctionnée par la loi. Nous testons l’hypothèse que les migrants acquièrent des opinions différentes en la matière dans les pays d’accueil où l’excision est moins fréquente voire interdite et qu’une fois de retour ils induisent un changement de comportement dans leurs villages d’origine. Nous mobilisons une base originale de données sur l’excision des filles de 0 à 14 ans couplée avec des données de recensement qui permettent de mesurer les taux de migration (courante et de retour) des villages de résidence des personnes interrogées et mettons en œuvre une méthode instrumentale pour contrôler de l’endogénéité de la migration. Nous montrons que les migrants de retour ont effectivement une influence négative et significative sur le risque d’excision et que ce résultat provient essentiellement des migrants de Côte d’Ivoire. Nous montrons également que les adultes vivant dans les villages avec des migrants de retour sont plus en faveur de la législation contre les mutilations génitales.

Keywords:

Female Genital Excision, social transfers, migration, Mali, Excision, transferts sociaux.

JEL:

I15 O55 F22

URL:

http://d.repec.org/n?u=RePEc:dia:wpaper:dt201416&r=soc

Date:

2015-01

By:

Ekaterina Melnik (CEE and LEST / Aix-Marseille University and CNRS) ; Jean-Benoît Zimmermann (Aix-Marseille University (Aix-Marseille School of Economics) GREQAM / CNRS and EHESS)

This paper sheds new light on the economic logic of voluntary associations and the relationship between individual contribution and collective action. The aims are twofold. Firstly, we seek to explain how “team reasoning” (Bacharach et al. 2006) can deeply change the functioning of voluntary associations (which are considered to produce a public good) when some or all of the individual members group together to make collective decisions about their involvement or contribution, rather than deciding separately. Secondly, we seek to better understand the effects of heterogeneity of resources on individual involvement, in terms of both the budget constraints of individual members and their capacity to contribute differentiated non-monetary contributions to the association, in relation to the diversity of their personal abilities and preferences about the characteristics of the good produced. To this end, we use a model of voluntary association collectively producing a public good, where monetary contributions (compulsory fees plus voluntary donations) is combined with volunteering. We analyze the conditions for an association to offer profitable conditions to its members and the consequences that can be drawn in terms of its existence and size. We show that, at equilibrium, the level of voluntary contributions is ceteris paribus higher when individuals make their decisions on the basis of team-reasoning rather than individually. We analyze the role played by heterogeneity of incomes in the formation of teams within associations. We then introduce the concept of subjective quality into the basic model. The originality of the model is that we assume the public good to be characterized by at least two main components: quantity and quality. The quantity is considered here as a purely public component, insofar as all the members benefit equally from it. However, the quality of the public good is assumed to be a mixed (public and private) component. The agents can enjoy part of it in the same way, but there may be certain characteristics of quality that are difficult or impossible to measure objectively. Quality is always somewhat subjective, to the extent that perfect correspondence with the preferences of heterogeneous agents is unlikely to occur. In our model, the agents can contribute money and/or time and effort. The latter, which we call volunteering, allows them to influence the quality of the good (or service) provided according to their own preferences.

Keywords:

voluntary associations, public good, contribution, voluteering, team reasonning, collective action

JEL:

C71 D71 H4 L3

URL:

http://d.repec.org/n?u=RePEc:aim:wpaimx:1502&r=soc

Date:

2014

By:

Glogowsky, Ulrich ; Cagala, Tobias ; Rincke, Johannes ; Grimm, Veronika

Cooperation in public good provision often depends on the trustworthiness of an administrator who may reduce contributors' returns from cooperation to her own benefit, and who herself may respond to the degree of cooperation among contributors. This paper analyses the interdependencies between cooperation and trustworthiness in a repeated game that replaces the mechanical public good administration in the Public Good Game with a human administrator. We present a new approach for visualizing conditional behavior in repeated sequential games. Our approach identifies the causal effects of cooperation on trustworthiness and vice versa by combining standard methods from time-series analysis with a design based identification strategy. We find that contributors and the administrator strongly respond to each other, resulting in cooperation and trustworthiness being strongly mutually interdependent. Furthermore, cooperation and trustworthiness are rather driven by changes in cooperation than by changes in trustworthiness.

JEL:

H41 H40 H49

URL:

http://d.repec.org/n?u=RePEc:zbw:vfsc14:100437&r=soc

Date:

2015-02

By:

María Victoria Anauati ; Brian Feld ; Sebastian Galiani ; Gustavo Torrens

We conducted a laboratory experiment to test the comparative statics predictions of a new approach to collective action games based on the method of stability sets. We find robust support for the main theoretical predictions. As we increase the payoff of a successful collective action (accruing to all players and only to those who contribute), the share of cooperators increases. The experiment also points to new avenues for refining the theory. We find that, as the payoff of a successful collective action increases, subjects tend to upgrade their prior beliefs as to the expected share of cooperators. Although this does not have a qualitative effect on comparative static predictions, using the reported distribution of beliefs rather than an ad hoc uniform distribution reduces the gap between theoretical predictions and observed outcomes. This finding also allows to decompose the mechanism that leads to more cooperation into a ”belief effect” and a ”range of cooperation effect”.

JEL:

C92 D72 H0 O0

URL:

http://d.repec.org/n?u=RePEc:nbr:nberwo:20936&r=soc

Date:

2015-02

By:

YOKOYAMA, Izumi ; OBARA, Takuya

In this paper, we analyze the formation of trusting relationships among people through communication. To foster trusting relationships, individuals must disclose private and personal information. However, disclosing such information has both costs and benefits; therefore, both parties must decide on the optimal level of self-disclosure based on a variety of factors, such as the current level of intimacy and the benefits of deepening this intimacy. We constructed an economics model that explains Altman and Taylor (1973)’s social penetration theory with a focus on one of its most important results: “reciprocal self-disclosure” increases during the initial stages of intimacy and then declines after a certain level of intimacy has been reached.

Keywords:

Communication model, Stackelberg game, Self-disclosure

JEL:

Z13 D03

URL:

http://d.repec.org/n?u=RePEc:hit:econdp:2015-03&r=soc

Date:

2015-01

By:

Fiorillo, Damiano ; Nappo, Nunzia

The paper assesses the causal relationship between formal volunteering and individual health. The econometric analysis employs data provided by the Income and Living Conditions Survey for the United Kingdom carried out by the European Union’s Statistics (UK-SILC) in 2006. Based on 2SLS, treatment effect and recursive bivariate probit models, and religious participation as instrument variable, and controlling for social and cultural capital, our results show a positive and causal relationship between formal volunteering and self-perceived health.

Keywords:

health, formal volunteering, social capital, instrumental variable, treatment effect model, recursive bivariate probit model, UK

JEL:

C3 C31 C35 C36 D6 D64 I1 I10 I18 Z10 Z12

URL:

http://d.repec.org/n?u=RePEc:pra:mprapa:62051&r=soc

Date:

2015-02-04

By:

Christopher P. Roth

I use a randomised conditional cash transfer program from Indonesia to provide evidence on peer effects in consumption of poor households.  I combine this with consumption visibility data from Indonesia to examine whether peer effects in consumption differ by a good's visibility.  In line with a model of conspicuous consumption, I find that the expenditure share of visible (nonvisible) goods rises (falls) for untreated households in treated sub-districts, whose reference group visible consumption is exogeneously increased.  Finally, I provide evidence on the mechanisms underlying the estimated spillovers using data on social interactions and social punishment norms.  In line with Veblen's (1899) claim that conspicuous consumption is more prevalent in societies with less social capital, I show that the peer effects in visible goods are larger in villages and for households with lower levels of social activities.

Keywords:

Conspicuous Consumption, Peer Effects, Relative Concerns, Spillovers, Social Interactions, Social Norms

JEL:

D12 C21 I38

URL:

http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2014-29&r=soc

Date:

2014

By:

Müller, Stephan ; von Wangenheim, Georg

That institutions matter is widely accepted among economists and so are social norms as an important category of informal institutions. Social norms matter in many economic situations, but in particular for markets. The economic literature has studied the interrelation between markets and social norms in both directions how social norms affect markets and how markets affect social norms. Starting from these two perspectives, we add to the literature, by suggesting a new link between product markets and the evolution of social norms: we analyze how the evolution of a social norm may be affected by a product innovation which adds to the variation of products with respect to their level of norm compliance. We derive necessary and sufficient conditions for a) a positive impact of the innovation on the level of norm adoption and b) for multiplicity of norm equilibria. Finally we discuss policy implications.

JEL:

A13 D02 D11

URL:

http://d.repec.org/n?u=RePEc:zbw:vfsc14:100535&r=soc

Date:

2014

By:

Weber, Andrea ; Saygin, Peri ; Weynandt, Michele

Social networks are an important channel of information transmission in the labor market. In this paper investigate how displaced workers searching for new jobs benefit from information provided by their former coworkers. In line with the theoretical and empirical literature we find that the employment status networks members matters for the job finding rate. We further analyze the mechanisms through which employed contacts affect job search outcomes and find that (i) the types of firms at which the contacts work are important and (ii) contacts with similar characteristics as the displaced worker lead to better outcomes. Our findings strongly indicate that job referrals from network members are the main mechanism by which social contacts influence job search outcomes.

JEL:

J01 J64 J63

URL:

http://d.repec.org/n?u=RePEc:zbw:vfsc14:100533&r=soc

Date:

2015-02-10

By:

Lindbeck, Assar (Research Institute of Industrial Economics (IFN)) ; Persson, Mats (Institute for International Economic Studies (IIES))

In this paper, we ask under what conditions norms can enhance welfare by mitigating moral hazard in income insurance. We point out a particular role of norms, namely to compensate for insurers’ difficulties in monitoring the behavior of insured individuals. Thus, the functioning of social norms depends crucially on information, in particular on what norm enforcers are able to observe about an insured individual’s behavior. Information is also decisive when distinguishing between social norms and internalized norms. We study how optimal insurance arrangements, the behavior of insured individuals, and welfare are influenced by norms. We also examine the optimal strength of norms. Generally speaking, the paper is a study of the interaction between norms and economic incentives.

Keywords:

Norms; Moral hazard; Insurance; Information

JEL:

D82 H55 H75 I13 J22

URL:

http://d.repec.org/n?u=RePEc:hhs:iuiwop:1058&r=soc

Date:

2014

By:

Mechtel, Mario ; Hett, Florian ; Kröll, Markus

This paper tests social identity theory with respect to individuals' self-identification behavior. We report results from a laboratory experiment in which subjects choose their group membership, which is interpreted as decision to identify with the respective group. Inducing a trade-off between monetary payoffs and different group identification choices we elicit the respective implicit valuations of identifying with different groups. The variation of these valuations is in line with the predictions from social identity theory: Subjects have a higher valuation for identifying with groups with a higher status and with groups to which they have a smaller social distance. Finally, we show that this behavior predicts individual out-group discrimination in allocation decisions, which has previously been shown to be associated with social identity. Overall our results provide strong support for the notion that individuals optimize behavior with respect to social identity.

JEL:

D01 D03 C90

URL:

http://d.repec.org/n?u=RePEc:zbw:vfsc14:100307&r=soc

By:

Niall O'Higgins ; Arturo Palomba ; Patrizia Sbriglia

There is little consensus on whether women are more generous than men, since some research results indicate a higher propensity to giving of female dictators, whilst some others indicate the opposite. Two explanations have been put forward. According to the first one, women are more generous than men and the conflicting results are due to the way preferences are elicited (Eckel and Grossman, 2002), since women are more sensitive to “social cues” and their preferences are more “malleable” (Croson and Gneezy, 2009). According to the second one, the institutional culture and the role women have in society are key elements in shaping gender differences in preferences. In fact, in matrilineal societies (Gong et al.; 2014; Gneezy et al.; 2009), women are self-oriented, more competitive and less generous than men, since they have an important role as economic decision makers in the family and the society. We test these alternative hypotheses running Dictators experiments in Italy, a western country with a matrilineal culture, introducing – at the same time- social influence in the design. We find more support to the hypothesis on the cultural role in shaping preferences, rather than the effects of social influence.

Keywords:

social influence, gender, experiments.

JEL:

C90 C91

URL:

http://d.repec.org/n?u=RePEc:usi:labsit:048&r=soc

Date:

2015-02

By:

Alexander Funcke (Philosophy, Politics and Economics, University of Pennsylvania) ;

Social norms and conventions have formally been defined as pertaining to static sets of situations. In this paper, we introduce a slight variation of Cristina Bicchieri's definition, where the set of situations is dynamically determined by previous actions. To suggest how the definition may be employed we first introduce a problem that would be hard to formulate within the classical definition: How to fight a destructive norm in a setting with a multitude of institutions. The example assumes that enforcement of conformative behavior in all institutions would be too costly. Further, enforcement of conformative behavior in a single institution would be drowned by defective behavioral spillovers from surrounding situations where the bad behavior is still the norm. The scheme drafted is to take the cost to enforce conformist behavior in a single institution while suspending the rest. The conformist behavior will after a while become the "the right thing to do" behavior in the kept institution.

Keywords:

social norms, case-based decision making, anti-corruption

JEL:

D81 D83 Z13

URL:

http://d.repec.org/n?u=RePEc:ppc:wpaper:0004&r=soc

Date:

2015

By:

Todd L. Cherry (Appalachian State University, CICERO Center for International Climate and Environmental Research) ; E. Lance Howe (University of Alaska Anchorage) ; James J. Murphy (University of Alaska Anchorage, Nankai University, Chapman University)

In rural economies with missing or incomplete markets, idiosyncratic risk is frequently pooled through informal networks. Idiosyncratic shocks, however, are not limited to private goods but can also restrict an individual from partaking in or benefiting from a collective activity. In these situations, a group must decide whether to provide insurance to the affected member. In this paper, we describe results of a laboratory experiment designed to test whether a simple sharing institution can sustain risk pooling in a social dilemma with idiosyncratic risk. We test whether risk can be pooled without a commitment device and, separately, whether effective risk pooling induces greater cooperation in the social dilemma. We find that even in the absence of a commitment device or reputational considerations, subjects voluntarily pool risk thereby reducing variance in individual earnings. In spite of effective risk pooling, however, cooperation in the social dilemma is unaffected.

Keywords:

collective action; experimental economics; idiosyncratic risk; income smoothing; insurance; lab experiment; public goods; risk pooling; resource sharing; social dilemma; social-ecological systems; team production

JEL:

C92 D81 O13 Q20

URL:

http://d.repec.org/n?u=RePEc:chu:wpaper:15-03&r=soc

Date:

2014

By:

Schröder, Marina ; Sadrieh, Abdolkarim

We introduce the give-or-destroy game that allows us to fully elicit an individual s social preference schedule. We find that about one third of the population exhibits both pro-social and anti-social preferences that are independent of payoff comparisons with those who are affected. We call this type of preference a desire to influence others. The other two thirds of the population consist to almost equal parts of payoff maximizers and pro-socials. Furthermore, we find that full information and experimenter demand may increase the extent of pro-social preferences, but do not affect the extent of anti-social preferences or the distribution of social types in the population.

JEL:

A13 C90 D63

URL:

http://d.repec.org/n?u=RePEc:zbw:vfsc14:100283&r=soc