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

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Measuring Trust: A Reinvestigation

1. Billur Aksoy; Haley Harwell; Ada Kovaliukaite; Catherine Eckel
2. The Impact of Cash Mobs in the Vote with the Wallet Game: Experimental Results - Leonardo Becchetti; Maurizio Fiaschetti; Francesco Salustri
3. Discrimination, social capital, and financial constraints: The case of Viet Nam - Tho Pham; Oleksandr Talavera
4. Social networks, geographic proximity, and firm performance in Viet Nam - Emma Howard
5. Inequality, ethnicity, and cross-group ties - Omar Shahabudin McDoom
6. Horizontal inequality, status optimization, and interethnic marriage in a conflict-affected society - Omar Shahabudin McDoom
7. Between Trust and Performance: Exploring Socio-Economic Mechanisms on Directed Weighted Regular Ring with Agent-Based Modeling - Gao, Lin
8. Irrigation, Collectivism and Long-Run Technological Divergence - Johannes C. Buggle

1. Measuring Trust: A Reinvestigation

   Billur Aksoy (Texas A&M University, Department of Economics)

   Haley Harwell (University of Richmond, Jepson School of Leadership Studies)

   Ada Kovaliukaite (Texas A&M University, Department of Economics)

   Catherine Eckel (Texas A&M University, Department of Economics)  We reinvestigate the question first posed by Glaeser, Laibson, Scheinkman and  Soutter (2000, GLSS hereafter): What is the best measure of trust for  predicting trusting behavior? This important study, cited over 2,100 times,  established that the behavior in the investment game, an incentivized measure  of trust, is not correlated with the responses to the most widely used survey  questions about trust, employed in the General Social Survey (GSS) and the  World Values Survey (WVS). We use the GLSS protocol with one major change: we  employ the original Berg et al. (1995) investment game instead of the  modified version used in GLSS. The standard game endows both players, while  the latter endows only the first mover, potentially changing the incentives  that influence subjects’ behavior. In particular, the utility from trusting  behavior for inequality averse individuals may be higher, if the second  movers are not endowed. Thus, such players may appear to be more trusting  even though they are simply inequality averse. This causes a distortion in  the laboratory measure of trust and reduces its correlation with the survey  measure of trust. In support of this concern, GLSS demonstrates that the  survey measure of trust is not correlated with trusting behavior in their  investment game, where the second mover is not endowed. After endowing the  second mover, we find the opposite. Our finding suggests that trust is a  single construct, whether measured by the survey questions or by an  incentivized game. This can be masked if the incentivized measure of trust is  confounded with other motives.

   Keywords: Investment game, replication, lab experiment, trust, trustworthiness, inequality aversion

   JEL: C91 D64

URL: http://d.repec.org/n?u=RePEc:txm:wpaper:20170119-001&r=soc

2. The Impact of Cash Mobs in the Vote with the Wallet Game: Experimental Results.

   Leonardo Becchetti (DEF & CEIS University of Rome Tor Vergata)

   Maurizio Fiaschetti (SOAS University of London)

   Francesco Salustri (DEF University of Rome Tor Vergata)  We simulate in a randomised lab experiment the effect of Cash Mobs on  consumers’ behaviour in an original variant of the multiplayer Prisoner’s  dilemma called Vote-with-the-Wallet Game (VWG). The effect is modelled in a  sequential game with/without an environmental frame in which a subset of  players (cash-mobbers) is given the opportunity to reveal publicly (in  aggregate without disclosing individual identities) their cooperation  decision. We find that the treatment has a positive gross effect, that is,  the share of cooperators is significantly higher in treated sessions and this  is mainly due to the higher share of cooperators among cash-mobbers. Our  results suggest that cash mobs-like mechanisms can help to solve social  dilemmas with entirely private solutions (not based on punishment but on  positive action) without costs for government budgets.

   Keywords: vote with the wallet, prisoner’s dilemma, randomised experiment

   JEL: C72 C73 C91 M14

URL: http://d.repec.org/n?u=RePEc:rtv:ceisrp:401&r=soc

3. Discrimination, social capital, and financial constraints: The case of Viet Nam

   Tho Pham

   Oleksandr Talavera

 This paper examines the relationship between gender, social capital, and  access to finance of micro, small, and medium enterprises in the  manufacturing sector in Viet Nam. Our dataset is from the 2011, 2013, and

 2015 waves of the Micro, Small, and Medium Enterprise Survey in Viet Nam.

 Using the Heckman technique to control for sample selection bias, the data do  not provide evidence for discrimination against female-owned enterprises in  the formal lending market. Specifically, female entrepreneurs have a higher  probability of getting a loan and they pay lower interest rates in comparison  with male entrepreneurs. No discrimination in formal credit markets may arise  from the preference for informal loans over formal loans—that is,  entrepreneurs tend to borrow informal loans before applying for formal ones.

 Further analysis shows that social capital could facilitate loan applications: firms that have a closer relationship with government officials  and other business people can get loans of longer duration.

URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-67&r=soc

4. Social networks, geographic proximity, and firm performance in Viet Nam

   Emma Howard

 This paper uses panel data to assess the relative importance of social  networks and geographic proximity to micro, small, and medium enterprises in  Viet Nam. The results suggest that a larger social network, and hiring  employees mainly through social networks, are both correlated with higher  value added per worker. The number of government officials and civil servants  in a firm’s network emerges as particularly important. When the quality of  contacts is controlled for, firms with tighter social networks have, on  average, higher value added per worker. The analysis of spatial networks  reveals that firms with a lower percentage of customers and suppliers in the  same district actually have higher value added per worker. The results  suggest that for micro, small, and medium firms in Viet Nam, strong social  networks are much more important than geographic proximity.

URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-69&r=soc

5. Inequality, ethnicity, and cross-group ties

   Omar Shahabudin McDoom

 How do changes in socioeconomic inequality between ethnic groups affect  interethnic ties in a divided society? I analyse the evolution of  cross-ethnic marriages in a society affected by violence along ethnic  boundaries and make three principal findings. First, as inequality between  ethnic groups increases, the prospects of interethnic marriages decline.

 Status equalization between ethnic groups promotes cross-ethnic ties. Insofar  as intermarriage indicates social cohesion, reducing ethnic inequality in  multiethnic societies may facilitate ethnic integration. Second, the effect  of ethnic inequality is not uniform across ethnic groups. Endogamy remains  high among certain groups even when socio-economic disparities diminish. I  suggest this is because the ethnic norms and sanctions proscribing  outmarriage are particularly powerful within these groups. Third, the social  and political salience of ethnic boundaries may be distinct. Intermarriages  can increase even as civil war violence intensifies. Ethnic divisions risk  being overstated by assuming political attitudes also drive choices in the  social sphere. I establish these findings in the deeply-divided society of  Mindanao in the southern Philippines by analysing over 6.2 million marriages  and comparing individual-level census data for the years 2000 and 2010.

 Mindanao is home to a longstanding insurgency, waged by rebels drawn from the  native Muslim Moro population resentful of their minoritization and  dispossession by Christian settlers.

   JEL: N0

URL: http://d.repec.org/n?u=RePEc:ehl:lserod:73432&r=soc

6. Horizontal inequality, status optimization, and interethnic marriage in a conflict-affected society

   Omar Shahabudin McDoom

 Although several theories of interethnic conflict emphasize ties across group  boundaries as conducive to ethnic coexistence, little is known about how such  ties are formed. Given their integrative potential, I examine the  establishment of cross-ethnic marital ties in a deeply divided society and  ask what drives individuals to defy powerful social norms and sanctions and  to choose life-partners from across the divide. I theorize such choices as  the outcome of a struggle between social forces and individual autonomy in  society. I identify two channels through which social forces weaken and  individual autonomy increases to allow ethnic group members to establish ties  independently of group pressures: elite autonomy and status equalization. I  find, first, that as an individual’s educational status increases, and  second, as between-group inequality declines, individuals enjoy greater  freedom in the choice of their social ties. However, I also find that in an  ethnically ranked society this enhanced autonomy is exercised by members of  high-ranked and low-ranked groups differently. Members from high-ranked  groups become more likely to inmarry; low-ranked group members to outmarry. I  suggest a status-optimization logic lies behind this divergent behaviour.

 Ethnic elites from high-ranked groups cannot improve their status through  outmarriage and their coethnics, threatened by the rising status of the  lower-ranked group, seek to maintain the distinctiveness of their status  superiority through inmarriage. In contrast, as their own individual status  or their group’s relative status improves, members of low-ranked groups take  advantage of the opportunity to upmarry into the higher-ranked group. I  establish these findings in the context of Mindanao, a conflict-affected  society in the Philippines, using a combination of census micro-data on over  two million marriages and in-depth interview data with inmarried and  outmarried couples.

URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-167&r=soc

7. Between Trust and Performance: Exploring Socio-Economic Mechanisms on Directed Weighted Regular Ring with Agent-Based Modeling

   Gao, Lin

 This paper explores the evolution of interaction and cooperation supported by  individuals’ changing trust and trustworthiness on directed weighted regular  ring though agent-based modeling. This agent-based model integrates fragility  of trust, interaction decision, strategy decision, payoff matrix decision,  interaction density and information diffusion. Marginal rate of exploitation  of original payoff matrix and relative exploitation degree between the  original and mutated payoff matrices are stressed in trust updating;  influence of observing is introduced via imagined strategy; relation is  maintained through relation maintenance strength. The impact of degree of  embeddedness in social network, mutation probability of payoff matrix,  mutated payoff matrix, proportion of high trust agents and probabilities of  information diffusion within neighborhood and among non-neighbors on the sum  of number of actual interaction and cooperation of all agents are probed on  the base of a baseline simulation, respectively. Under the experimental  design and parameter values selection in this paper, it is found that  basically as degree of embeddedness in social network, proportion of high  trust agents and probability of information diffusion in neighbors increase,  as mutation probability of payoff matrix, conflict in mutated payoff matrix  and probability of information diffusion in non-neighbors decrease,  interaction and cooperation perform better.

   Keywords: Trust, directed weighted regular ring, agent-based modeling, evolution of cooperation

   JEL: B52 C63 D82 D85

URL: http://d.repec.org/n?u=RePEc:pra:mprapa:78428&r=soc

8. Irrigation, Collectivism and Long-Run Technological Divergence

   Johannes C. Buggle

 This paper explores the historical origins of collectivist cultural norms and  their longterm economic consequences. In its first part, I test the  hypothesis that collectivism emerged historically in pre-industrial  agricultural economies in which group effort was crucial for subsistence. I  find a positive and significant association between the traditional use of  irrigation - a production mode that required extensive collaboration and  coordination within groups of farmers - and collectivist norms today.

 Instrumenting traditional irrigation by the environmental suitability for  irrigated agriculture lead to similar results that point at a causal  interpretation of the findings. I find that the effects persist in migrants,  and investigate factors that hinder the transmission of collectivism. The  second part of the paper shows that by affecting culture, past irrigated  agriculture continues to influence contemporaneous innovation at the national  and individual level. While irrigated agriculture is associated with greater  technological progress in pre-modern societies, this relationship is reversed  in the long-run. In addition, by favoring attitudes towards obedience, past  irrigation also predicts patterns of job specialization and selection into  routine-intensive jobs of countries and individuals.

   Keywords: Agriculture; Culture, Collectivism, Persistence, Innovation, Job Tasks

   JEL: N00 O10 O30 Z10

URL: http://d.repec.org/n?u=RePEc:lau:crdeep:17.06&r=soc

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