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on Social Norms and Social Capital |
| By: | Robert Dur (Erasmus University Rotterdam, CESifo, and IZA); Jan Tichem (Erasmus University Rotterdam) |
| Abstract: | This paper studies how social relationships between managers and employees affect relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The contract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find that good social relationships undermine the credibility of a threat of dismissal but strengthen the credibility of a bonus. Among others, these two mechanisms imply that better social relationships sometimes lead to higher bonuses, while worse social relationships may increase productivity and players' utility in equilibrium. |
| Keywords: | Altruism, spite, social relations, incentives, relational contracts, efficiency wages, subjective performance evaluation, Nash bargaining |
| JEL: | D23 J33 M52 M55 |
| Date: | 2012–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012054&r=soc |
| By: | Filipe R. Campante; Ruben Durante; Francesco Sobbrio |
| Abstract: | We investigate the impact of the diffusion of high-speed Internet on different forms of political participation, using data from Italy. We exploit differences in the availability of ADSL broadband technology across municipalities, using the exogenous variation induced by the fact that the cost of providing ADSL-based Internet services in a given municipality depends on its relative position in the pre-existing voice telecommunications infrastructure. We first show that broadband Internet had a substantial negative effect on turnout in parliamentary elections between 1996 and 2008. However, we also find that it was positively associated with other forms of political participation, both online and offline: the emergence of local online grassroots protest movements, and turnout in national referenda (largely opposed by mainstream parties). We then show that the negative effect of Internet on turnout in parliamentary elections is essentially reversed after 2008, when the local grassroots movements coalesce into the Five-Star Movement (M5S) electoral list. Our findings are consistent with the view that: 1) the effect of Internet availability on political participation changes across different forms of engagement; 2) it also changes over time, as new political actors emerge who can take advantage of the new technology to tap into the existence of a disenchanted or demobilized contingent of voters; and 3) these new forms of mobilization eventually feed back into the mainstream electoral process, converting “exit” back into “voice”. |
| JEL: | D72 L82 L86 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19029&r=soc |
| By: | Ott Toomet (Tartu University); Marco van der Leij (University of Amsterdam); Meredith Rolfe (London School of Economics) |
| Abstract: | This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps. |
| Keywords: | social networks, wage differential, homophily, segregation, race, minorities |
| JEL: | J71 J31 Z13 |
| Date: | 2012–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012120&r=soc |
| By: | Spring, Eva (University of Fribourg); Grossmann, Volker (University of Fribourg) |
| Abstract: | Trust in the citizens of a potential partner country may affect the decision to trade with or to migrate to a foreign country. This paper employs panel data to examine the causal impact of such bilateral trust on international trade and migration patterns. We apply instrumental variables (IV) approaches that capture the exogenous variance of bilateral trust separately with eight indicators of genetic ("somatic") distance between country-pairs. These indicators work equally well at the first stage. However, second-stage results very much depend on the exact measure employed as instrument. Overall, we find little evidence that bilateral trust affects international movements of goods and labor. More generally, we highlight the potential fragility of IV estimations even when the instruments seem plausible on theoretical grounds and when standard statistical tests confirm their validity. |
| Keywords: | instrumental variables, international trade, international migration, bilateral trust, somatic distance |
| JEL: | F10 F22 Z10 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7385&r=soc |
| By: | Wim Bernasco (NSCR); Thomas de Graaff (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam); Wouter Steenbeek (NSCR) |
| Abstract: | Using data on the age, sex, ethnicity and criminal involvement of 14.3 million residents aged 10-89 residing in 4,007 neighborhoods in the Netherlands, this article tests whether an individual's decision whether or not to be involved in crime is affected by the number of criminals in the neighborhood. Controlling for unobserved neighborhood heterogeneity and endogeneity of this decision, a small positive effect is found on violent crime, but not on property crime. The results suggest that individual characteristics and other neighborhood characteristics play a much greater role in an individual's decision to be involved in crime. |
| Keywords: | social interactions, neighborhoods, crime |
| JEL: | R1 R2 |
| Date: | 2012–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012108&r=soc |
| By: | Ramon Flores (Universidad Carlos III de Madrid); Maurice Koster (University of Amsterdam); Ines Lindner (VU University Amsterdam); Elisenda Molina (Universidad Carlos III de Madrid) |
| Abstract: | This paper proposes a new measure for a group's ability to lead society to adopt their standard of behavior, which in particular takes account of the time the group takes to convince the whole society to adopt their position. This notion of a group's power to initiate action is computed as the reciprocal of the resistance against it, which is in turn given by the expected absorption time of a related finite state partial Markov chain that captures the social dynamics. The measure is applicable and meaningful in a variety of models where interaction between agents is formalized through (weighted) binary relations. Using Percolation Theory, it is shown that the group power is monotonic as a function of groups of agents. We also explain the differences between our measure and those discussed in the literature on Graph Theory, and illustrate all these concerns by a thorough analysis of two particular cases: the Wolfe Primate Data and the 11S hijackers' network. |
| Keywords: | Collective action, Social networks, Influence and diffusion models, Network intervention, Group centrality measures |
| JEL: | C79 D01 D71 |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012032&r=soc |
| By: | Cai, Jing; de Janvry, Alain; Sadoulet, Elisabeth |
| Abstract: | Using data from a randomized experiment in rural China, this paper studies the influence of social networks on weather insurance adoption and the mechanisms through which social networks operate. To quantify network effects, the experiment offers intensive information sessions about the insurance product to a random subset of farmers. For untreated farmers, the effect of having an additional treated friend on take-up is equivalent to granting a 15% reduction in the insurance premium. By varying the information available about peers’ decisions and using randomized default options, the experiment shows that the network effect is driven by the diffusion of insurance knowledge rather than purchase decisions. |
| Keywords: | Social network, Insurance demand, Learning |
| JEL: | D12 D83 G22 O33 |
| Date: | 2013–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46861&r=soc |
| By: | Eduard J. Bomhoff; Grace Lee Hooi Yean |
| Keywords: | social capital, general trust, in-trust/out-trust, civicness |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2013-04&r=soc |
| By: | Dai, Shuanping |
| Abstract: | Institutions are the equilibrium states of games, and the emergence of institutions is an evolutionary, stochastic, and (social) structural dependence process of interactions among agents. In this paper, we address the relationship between the institutional emergence and the structure of social interactions under the context of (network) coordination games. The model here shows when the agents are socially restricted, and individual decision-making is based on mutual agreements, inefficient institutions will be the stable states in the long run, say, institutions are locked-in inefficiently. When the agents are not restricted socially, the institutional stability will wander between two states. The efficient institutions can emerge only as the agents are facing strong cost constraints and, are in the contexts with relative high certainties, for instance, as the interactive population size is becoming smaller. |
| Keywords: | Institutional Emergence, Coordination Games, Stochastically Stable Equilibrium, Network Formation, Social Distance |
| JEL: | B15 B52 C73 |
| Date: | 2012–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47011&r=soc |
| By: | Dur, Robert (Erasmus University Rotterdam); Tichem, Jan (Erasmus University Rotterdam) |
| Abstract: | This paper studies how altruism between managers and employees affects relational incentive contracts. To this end we develop a simple dynamic principal-agent model where both players may have feelings of altruism or spite toward each other. The con- tract may contain two types of incentives for the agent to work hard: a bonus and a threat of dismissal. We find that altruism undermines the credibility of a threat of dis- missal but strengthens the credibility of a bonus. Among others, these two mechanisms imply that higher altruism sometimes leads to higher bonuses, while lower altruism may increase productivity and players utility in equilibrium. |
| Keywords: | altruism, spite, incentives, relational contracts, efficiency wages, subjective performance evaluation, Nash bargaining |
| JEL: | D23 J33 M52 M55 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7363&r=soc |