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on Social Norms and Social Capital |
| By: | Attila Ambrus (Harvard University); Markus Mobius (Harvard University); Adam Szeidl (University of California, Berkeley) |
| Abstract: | We build a model of informal risk-sharing among agents organized in a social network. A connection between individuals serves as collateral that can be used to enforce insurance payments. We characterize incentive compatible risk-sharing arrangements for any network structure, and develop two main results. (1) Expansive networks, where every group of agents have a large number of links with the rest of the community relative to the size of the group, facilitate better risk-sharing. In particular, “two-dimensional” village networks organized by geography are sufficiently expansive to allow very good risk-sharing. (2) In second-best arrangements, agents organize in endogenous “risksharing islands” in the network, where shocks are shared fully within but imperfectly across islands. As a result, risk-sharing in second-best arrangements is local: socially closer agents insure each other more. In an application of the model, we explore the spillover effect of development aid on the consumption of non-treated individuals. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ads:wpaper:0079&r=soc |
| By: | Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena, Germany) |
| Abstract: | We report on an experiment designed to explore whether allowing individuals to voice their anger prevents costly punishment. For this sake, we use an ultimatum minigame and distinguish two treatments: one in which responders can only accept or reject the other, and the other in which they can also scold the proposer. By an unannounced successive two-person public goods game, with either the same partner or a different one, we additionally explore how "having a voice" affects later behavior. The evidence supports the conclusion that voicing one's outrage crowds out the need to harm oneself and the other. Yet, this emotional reaction does not lead to increased future cooperation. |
| Keywords: | Ultimatum bargaining, Public goods game, Outrage, Punishment |
| JEL: | C72 C78 C92 H41 |
| Date: | 2007–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-096&r=soc |
| By: | Claudia Biancotti (Bank of Italy, Economics and Financial Statistics Department); Giovanni D'Alessio (Bank of Italy, Economics and Financial Statistics Department) |
| Abstract: | This paper examines the relationship between inequality and happiness through the lens of heterogeneous values, beliefs and inclinations. Drawing upon opinion data from the European Social Survey for twenty-three countries, we find that individual views on a wide range of themes can be effectively summarized by two orthogonal dimensions: moderation and inclusiveness. The former is defined as a tendency to take mild stands on issues rather than extreme ones; the latter is defined as the degree of support for a social model that grants equal rights and opportunities to everyone who willingly subscribes to a shared set of rules, regardless of background and circumstances. These traits matter when it comes to how inequality affects subjective well-being; specifically, those who are either more moderate or more inclusive than their average compatriot tend to dislike inequality. With reference to moderation, inequality aversion can be read in terms of a desire for stability: people who are reluctant to take strong stands probably dislike conflict, tension and unrest, which normally accompany inequalities. With reference to inclusiveness, the main element at play is likely to be distress accruing to a perception of unfairness. |
| Keywords: | Happiness, inequality, heterogeneity |
| JEL: | D31 D63 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2007-75&r=soc |
| By: | Adaman, Fikret; Ardic, Oya Pinar; Erus, Burcay; Tuzemen, Didem |
| Abstract: | This paper analyzes the patient characteristics that affect the choice between public and private health care providers in Istanbul, Turkey. In addition to socioeconomic variables, such as insurance status or income, which have often been considered in the previous literature, we also focus on another factor, the availability of social networks, which might determine ease of access to hospital services in developing countries. The analysis is based on data from a household survey conducted in Istanbul. The econometric results indicate that potential social ties play an important role in choosing public health care centers over private ones for minor health problems. As public facilities have long been characterized by long waiting lines even for appointments for medical exams, this finding indicates that households who possess higher levels of social networks might be using those in easing access to public facilities. |
| Keywords: | Public vs. Private Health Care Providers; Hospital Choice; Social Networks; Household Survey; Turkey. |
| JEL: | D12 Z13 C25 I10 |
| Date: | 2007–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6093&r=soc |
| By: | C. Cordes |
| Abstract: | This paper incorporates aspects of humans’ evolved cognition into a formal model of cultural evolution and scrutinizes their interactions with population-level processes. It is shown how the biased transmission of different kinds of behavior via cultural learning processes influences agents’ consumption behavior. Thereby, the model’s learning dynamics are capable of generating typical Veblenian consumption dynamics. Based on these insights, the paper then scrutinizes on the role of humans’ biological heritage and Darwinian concepts in the development of economic theories in general. Moreover, the relation of the ontological basis of biological and cultural evolution is addressed. |
| Keywords: | Conspicuous consumption, Economic theory development, Evolutionary economics, Darwinism, Cultural evolution Length 31 pages |
| JEL: | A12 B41 B52 C60 D11 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2007-13&r=soc |
| By: | Lim, Jamus Jerome; Decker, Jessica Henson |
| Abstract: | The recent empirical growth literature has proposed three underlying fundamental determinants of economic growth, namely, physical geography, economic integration, and institutional quality. This paper unpacks the final determinant into both political-economic institutions as well as the primarily political institution of democratic development. Using both cross-sectional and panel datasets, we show that, properly instrumented, there is no evidence that democracies grow faster or slower than non-democracies. This result is in contrast to much of the more recent literature, which tend to find a weakly positive relationship. Political economic institutions, however, remain positive and significant determinants of economic growth, which corroborates much of the empirical evidence in the existing literature. |
| Keywords: | Economic growth; institutions; democracy |
| JEL: | O47 O17 P51 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6076&r=soc |
| By: | Meyer, Peter B. (U.S. Bureau of Labor Statistics) |
| Abstract: | Airplanes were invented by hobbyists and experimenters, and some personal computers were as well. Similarly, many open-source software developers are interested in the software they make, and not focused on profit. Based on these cases, this paper has a model of agents called tinkerers who want to improve a technology for their own reasons, by their own criteria, and who see no way to profit from it. Under these conditions, they would rather share their technology than work alone. The members of the agreement form an information network. The network's members optimally specialize based on their opportunities in particular aspects of the technology or in expanding or managing the network. Endogenously there are incentives to standardize on designs and descriptions of the technology. A tinkerer in the network who sees an opportunity to produce a profitable product may exit the network to create a startup firm and conduct focused research and development. Thus a new industry can arise. |
| Keywords: | Technological Change, Open Source Software, Uncertainty, Innovation, Invention, Collective Invention, Hackers, Hobbyists, Experimenters, Airplane |
| JEL: | O3 O31 O34 N10 D83 D85 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec070120&r=soc |
| By: | Laura Juarez (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM)) |
| Abstract: | This paper uses a recent demogrant for the elderly in Mexico City to estimate the e¤ect of an exogenous increase in the income of older individuals on the amount of private transfers they receive. My results show that not controlling for the endogeneity of income replicates the positive or small negative e¤ects of income on the amount of private transfers received obtained by previous work. In contrast, my instrumental variables strategy yields negative and signi.cant income e¤ects, not far from the minus one implied by altruistic models, suggesting that a change in the public resources for elderly could be neutralized by the response of private transfers. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cie:wpaper:0707&r=soc |