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on Social Norms and Social Capital |
| By: | Yann Bramoullé; Bernard Fortin |
| Abstract: | In a social network, agents have their own reference group that may influence their behavior. In turn, the agents' attributes and their behavior affect the formation and the structure of the social network. We survey the econometric literature on both aspects of social networks and discuss the identification and estimation issues they raise. |
| Keywords: | Social network, peer effects, identification, network formation, pair-wise regressions, separability, mutual consent |
| JEL: | D85 L14 Z13 C3 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0913&r=soc |
| By: | Matthias Sutter; Peter Lindner; Daniela Platsch |
| Abstract: | This paper examines the influence of third-party observation and third-party reward on behavior in an experimental prisoner’s dilemma (PD) game. Whereas the existing literature on third-party intervention as a means to sustain social norms has dealt almost exclusively with third-party punishment, we show that both third-party observation and third-party reward have positive effects on cooperation rates, compared to a treatment where no third party is involved. Third-party reward is more effective in increasing cooperation than third-party observation. However, rewards are given too late to prevent a steady downward trend of cooperation rates. |
| Keywords: | Social norms, third-party reward, third-party observation, prisoner’s dilemma experiment |
| JEL: | C72 C91 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2009-08&r=soc |
| By: | Ballester, Coralio (University of Alicante); Calvó-Armengol, Antoni (Universitat Autònoma de Barcelona); Zenou, Yves (Stockholm University) |
| Abstract: | Delinquents are embedded in a network of relationships. Social ties among delinquents are modeled by means of a graph where delinquents compete for a booty and benefit from local interactions with their neighbors. Each delinquent decides in a non-cooperative way how much delinquency effort he will exert. Using the network model developed by Ballester et al. (2006), we characterize the Nash equilibrium and derive an optimal enforcement policy, called the key-player policy, which targets the delinquent who, once removed, leads to the highest aggregate delinquency reduction. We then extend our characterization of optimal single player network removal for delinquency reduction, the key player, to optimal group removal, the key group. We also characterize and derive a policy that targets links rather than players. Finally, we endogenize the network connecting delinquents by allowing players to join the labor market instead of committing delinquent offenses. The key-player policy turns out to be much more complex since it depends on wages and on the structure of the network. |
| Keywords: | social networks, delinquency decision, key group, NP-hard problem, crime policies |
| JEL: | A14 C72 K42 L14 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4122&r=soc |
| By: | Tesssa Bold; Stefan Dercon |
| Abstract: | In many rural settings, informal mutual support networks have evolved into semiformal insurance groups, such as funeral societies. Using detailed panel data for six villages in Ethiopia, we can distinguish two types of contracts, in terms of whether payments are only made at the time of death or savings are accumulated by the group based on premiums paid ex-ante. We characterize these contracts as the coalition-proof equilibria of a symmetric and stationary risk-sharing game, and we show numerically that a contract with savings makes higher demands on enforceability, leading to less cohesive groups finding it in their interest to choose the contract without savings and that coalition-proofness is a necessary condition for the coexistence of both contract types. We show in the data that the type of contract chosen by groups is correlated with the level of trust and other enforcement improving factors. We also predict that among the observed contracts, those with group-based savings and ex-ante payments will attain higher welfare in terms of consumption smoothing than those observed using no group savings. Using panel data, and controlling for household fixed effects and time-varying village level fixed effects, we show that funeral groups are vehicles for risk-sharing and that contract type matters for performance in line with these predictions. The results appear robust to endogeneity of group formation and endogenous selection into contract types. |
| Keywords: | Insurance, Savings, Coalition formation |
| JEL: | D02 D12 D86 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:421&r=soc |
| By: | Roland Pongou (Brown University); Roberto Serrano (Brown University and IMDEA Social Sciences) |
| Abstract: | We study the dynamic stability of fidelity networks, which are networks that form in a mating economy of agents of two types (say men and women), where each agent desires direct links with opposite type agents, while engaging in multiple partnerships is considered an act of infidelity. Infidelity is punished more severely for women than for men. We consider two stochastic processes in which agents form and sever links over time based on the reward from doing so, but may also take non-beneficial actions with small probability. In the first process, an agent who invests more time in a relationship makes it stronger and harder to break by his/her partner; in the second, such an agent is perceived as weak. Under the first process, only egalitarian pairwise stable networks (in which all agents have the same number of partners) are visited in the long run, while under the second, only anti-egalitarian pairwise stable networks (in which all women are matched to a small number of men) are. Next, we apply these results to find that under the first process, HIV/AIDS is equally prevalent among men and women, while under the second, women bear a greater burden. The key message is that anti-female discrimination does not necessarily lead to higher HIV/AIDS prevalence among women in the short run, but it does in the long run. |
| Keywords: | fidelity networks; anti-female discrimination; stochastic stability; HIV/AIDS; union formation models |
| JEL: | A14 C7 I12 J00 |
| Date: | 2009–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2009-03&r=soc |
| By: | Kathleen J. Mullen; Richard G. Frank; Meredith B. Rosenthal |
| Abstract: | Despite the popularity of pay-for-performance (P4P) among health policymakers and private insurers as a tool for improving quality of care, there is little empirical basis for its effectiveness. We use data from published performance reports of physician medical groups contracting with a large network HMO to compare clinical quality before and after the implementation of P4P, relative to a control group. We consider the effect of P4P on both rewarded and unrewarded dimensions of quality. In the end, we fail to find evidence that a large P4P initiative either resulted in major improvement in quality or notable disruption in care. |
| JEL: | D23 H51 I12 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14886&r=soc |
| By: | Yamamura, Eiji |
| Abstract: | This study explored how social pressure related to parental preference for the sex of their children affects fertility. Pre-war and post-war generations were compared using individual level data previously collected in Japan in 2002. In the pre-war generation, if the first child was a daughter, the total number of children tended to increase regardless of the mother’s sex preference. This tendency was not observed for the post-war generation. Results suggest that social pressure related to giving birth to a son led to high fertility in the pre-war generation; however, fertility was not influenced by social pressure in the post-war generation. |
| Keywords: | Fertility; son preference; social pressure; family structure. |
| JEL: | J13 J12 J16 |
| Date: | 2009–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14647&r=soc |
| By: | Reuben, Ernesto (Northwestern University); Suetens, Sigrid (Tilburg University) |
| Abstract: | We use a novel experimental design to disentangle strategically- and non-strategically-motivated cooperation. By using contingent responses in a repeated sequential prisoners' dilemma with a known probabilistic end, we differentiate end-game behavior from continuation behavior within individuals while controlling for expectations. This design allows us to determine the extent to which strategically-cooperating individuals are responsible for the so-called end-game effect. Experiments with two different subject pools indicate that the most common motive for cooperation in repeated games is strategic and that the extent to which end-game effects are driven by strategically-cooperating individuals depends on the profitability of cooperation. |
| Keywords: | reputation building, strong reciprocity, conditional cooperation, strategic cooperation |
| JEL: | C91 D01 D74 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4107&r=soc |
| By: | Reuben, Ernesto (Northwestern University); Tyran, Jean-Robert (University of Copenhagen) |
| Abstract: | We test if cooperation is promoted by rank-order competition between groups in which all groups can be ranked first, i.e. when everyone can be a winner. This type of rank-order competition has the advantage that it can eliminate the negative externality a group's performance imposes on other groups. However, it has the disadvantage that incentives to outperform others are absent if groups perform at the same level and it therefore does not eliminate low-cooperation equilibria. We find that all-can-win competition produces a universal increase in cooperation and benefits a majority of individuals if incentives to compete are strong. |
| Keywords: | intergroup competition, cooperation, public goods, experiment |
| JEL: | H41 M52 C92 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4112&r=soc |
| By: | Jean-Paul Carvalho |
| Abstract: | There has been a dramatic surge in Islamic participation and values since the 1970s. We propose a theory of the contemporary Islamic revival based upon two forms of relative deprivation - envy and unfulfilled aspirations. To analyze these motivations, a behavioral model of religion is developed in which agents have reference-dependent preferences. We demonstrate that raised aspirations, low social mobility, high income inequality and poverty are intimately related, not separate causes of a religious revival. As such, the origins of the Islamic revival are traced to a combination of two developments: (1) a growth reversal which raised aspirations and led subsequently to a decline in social mobility which left aspirations unfulfilled among the educated middle class, (2) increasing income inequality impoverishment of the lower-middle class. The sexual revolution in the West and rapid urbanization in Muslim societies intensified this process of religious revival. |
| Keywords: | Islamic revival, Economics of religion, Endogenous preferences, Reference-dependent preferences, Inequality, Relative deprivation |
| JEL: | Z12 J22 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:424&r=soc |
| By: | Fletcher, Erin (University of Colorado, Boulder); Iyigun, Murat (University of Colorado, Boulder) |
| Abstract: | Ethnic and religious fractionalization have important effects on economic growth and development, but their role in internal violent conflicts has been found to be negligible and statistically insignificant. These findings have been invoked in refutation of the Huntington hypothesis, according to which differences of ethnic, religious and cultural identities are the ultimate determinants of conflict. However, fractionalization in all its demographic forms is endogenous in the long run. In this paper, we empirically investigate the impact of violent conflicts on ethno-religious fractionalization. The data involve 953 conflicts that took place in 52 countries in Europe, Africa and the Middle East between 1400 CE and 1900 CE. Besides a variety of violent confrontations ranging from riots, revolts and power wars between secular sovereigns, the data cover religiously motivated confrontations. We document that countries in which Muslim on Christian wars unfolded more frequently are significantly more religiously homogenous today. In contrast, those places where Protestant versus Catholic confrontations occurred or Jewish pogroms took place are more fractionalized, both ethnically and religiously. And the longer were the duration of all such conflicts and violence, the less fractionalized countries are today. These results reveal that the demographic structure of countries in Europe, the Middle East and North Africa still bear the traces of a multitude of ecclesiastical and cultural clashes that occurred throughout the course of history. They also suggest that endogeneity could render the relationship between fractionalization and the propensity of internal conflict statistically insignificant. Finally, instrumenting for conflicts with some geographic attributes and accounting for the endogeneity of fractionalization with respect to ecclesiastical conflicts shows that religous fractionalization likely has negative effects on economic growth. |
| Keywords: | conflict, religion, institutions, economic development |
| JEL: | C72 D74 N33 N43 O10 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4116&r=soc |
| By: | Claudio Ferraz; Frederico Finan |
| Abstract: | Recent studies have emphasized the importance of the quality of politicians for good government and consequently economic performance. But if the quality of leadership matters, then understanding what motivates individuals to become politicians and perform competently in office becomes a central question. In this paper, we examine whether higher wages attract better quality politicians and improve political performance using exogenous variation in the salaries of local legislators across Brazil’s municipal governments. The analysis exploits discontinuities in wages across municipalities induced by a constitutional amendment defining caps on the salary of local legislatures according to municipal population. Our main findings show that higher wages increases political competition and improves the quality of legislators, as measured by education, type of previous profession, and political experience in office. In addition to this positive selection, we find that wages also affect politicians’ performance, which is consistent with a behavioral response to a higher value of holding office. |
| JEL: | D72 D78 J33 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14906&r=soc |