In this issue we feature 13 current papers on the theme of social capital:

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In this issue we have:

1. Ethnic Diversity and Trust: New Evidence from Australian Data - Mendolia, Silvia; Tosh, Alex; Yerokhin, Oleg
2. On the social appropriateness of discrimination - Abigail Barr; Tom Lane; Daniele Nosenzo
3. Internet and Politics: Evidence from U.K. Local Elections and Local Government Policies - Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
4. Initial Conditions Matter: Social Capital and Participatory Development - Cameron, Lisa A.; Olivia, Susan; Shah, Manisha
5. Good Samaritans and the Market: Experimental Evidence on Other-Regarding Preferences in Partnership Formation - Belot, Michèle; Fafchamps, Marcel
6. The importance of peers for compliance with norms of fair sharing - Simon Gaechter; Leonie Gerhards; Daniele Nosenzo
7. Informal versus Formal Search: Which Yields a Better Pay? Tumen, Semih
8. The Problem with All-or-nothing Trust Games: What Others Choose Not to Do Matters In Trust-based Exchange - Schniter, Eric; Sheremeta, Roman; Shields, Timothy
9. Tax Evasion Revised: Surprising Experimental Evidence on the Role of Principal Witness Regulations and Differences in Gender Attitudes - Luigi Mittone; Johannes Buckenmaier; Eugen Dimant
10. Money and the Scale of Cooperation - M. Bigoni; G. Camera; M. Casari
11. Gender, beauty and support networks in academia: evidence from a field experiment - Michał Krawczyk; Magdalena Smyk
12. Destructive intergenerational altruism - Asheim, Geir B.; Nesje, Frikk
13. Do They Find You on Facebook? Facebook Profile Picture and Hiring Chances - Baert, Stijn

 1. Ethnic Diversity and Trust: New Evidence from Australian Data - Mendolia, Silvia (University of Wollongong); Tosh, Alex; Yerokhin, Oleg (University of Wollongong)

This paper investigates the relationship between neighbourhood ethnic and  linguistic heterogeneity and the formation of an individual's local and  general trust. A wide literature across economics and sociology has  recognised the importance of trust in facilitating economic growth and  development and it is therefore important to investigate elements of social  organisation that encourage or inhibit the development of trust. We use fixed  effects and instrumental variable regression and control for a wide set of  individual and local area characteristics to identify the effect of  heterogeneity on trust formation. Our results show that increasing  neighbourhood ethnic and linguistic fractionalisation is associated with a  decrease in local trust of about 12% of a standard deviation in the model  with fixed effects, while we do not find any significant relationship between  neighbourhood heterogeneity and general trust.

    Keywords: trust, social capital, ethnic fractionalization, ethnic

     heterogeneity, HILDA

    JEL: J15 Z10

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9544&r=soc

 2. On the social appropriateness of discrimination - Abigail Barr (Department of Economics, University of Nottingham.); Tom Lane (Department of Economics, University of Nottingham); Daniele Nosenzo (Department of Economics, University of Nottingham.)

We experimentally investigate the relationship between discriminatory  behaviour and the perceived social appropriateness of discrimination. We test  the framework of Akerlof and Kranton (2000,2005), which suggests  discrimination will be stronger when social norms favour it. Our results  support this prediction. Using a Krupka-Weber social norm elicitation task,  we find participants perceive it to be more socially appropriate to  discriminate on the basis of social identities artificially induced, using a  trivial minimal group technique, than on the basis of nationality.

Correspondingly, we find that participants discriminate more in the  artificial identity setting. Our results suggest norms and the preference to  comply with them affect discriminatory decisions and that the social  inappropriateness of discrimination can be a moderator of discriminatory  behaviour.

    Keywords: Discrimination; Social norms; Krupka-Weber method; Allocator game

URL: http://d.repec.org/n?u=RePEc:not:notcdx:2015-25&r=soc

 3. Internet and Politics: Evidence from U.K. Local Elections and Local Government Policies - Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso

We empirically study the effects of broadband internet diffusion on local  election outcomes and on local government policies using rich data from the  U.K. Our analysis suggests that the internet has displaced other media with  greater news content (i.e., radio and newspapers), thereby decreasing voter  turnout, most notably among less-educated and younger individuals. In turn,  local government expenditures (and taxes) are lower in areas with greater  broadband diffusion, particularly expenditures targeted at less-educated  voters. Our findings corroborate the idea that voters' information plays a  key role in determining electoral participation, government policies and  government size.

    Keywords: media; voting

    JEL: D72

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10991&r=soc

 4. Initial Conditions Matter: Social Capital and Participatory Development - Cameron, Lisa A. (Monash University); Olivia, Susan (Monash University); Shah, Manisha (University of California, Los Angeles) 

 Billions of dollars have been spent on participatory development programs in  the developing world. These programs give community members an active  decision-making role. Given the emphasis on community involvement, one might  expect that the effectiveness of this approach would depend on communities' pre-existing social capital stocks. Using data from a large randomised field  experiment of Community-Led Total Sanitation in Indonesia, we find that  villages with high initial social capital built toilets and reduced open  defecation, resulting in substantial health benefits. In villages with low  initial stocks of social capital, the approach was counterproductive – fewer  toilets were built than in control communities and social capital suffered.

    Keywords: participatory development, social capital, sanitation, economic

     development, Indonesia

    JEL: O12 O22 I15

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9563&r=soc

 5. Good Samaritans and the Market: Experimental Evidence on Other-Regarding Preferences in Partnership Formation - Belot, Michèle; Fafchamps, Marcel

 We construct an experiment to study the role of other-regarding preferences  in the process of partnership formation. The literature on decentralized  matching describes the process of match formation as a market-like process  while the literature on other-regarding preferences suggests that such  preferences are particularly strong in small partnerships. So we ask: do  people apply market-like heuristics when searching for a partner (i.e. behave  selfishly); or do they behave more pro-socially, as they do once these  partnerships or small entities are formed? And if they do behave differently,  what motivates differences in behavior? We focus on one possible mechanism  explaining differences in behavior: the saliency of the implications of  choices on others. We compare partnership choices in three treatments,  varying the saliency of the implications of choices on others. We find that a  market-like situation reduces the `good samaritan' spirit in this environment  as well: when choosing a partner agents are less likely to sacrifice their  own material well-being to increase the well-being of others.

    Keywords: Efficiency; Inequality; Markets; Other-regarding preferences;

     Partnership formation

    JEL: A13 C91 D61 D63 D64

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:11017&r=soc

 6. The importance of peers for compliance with norms of fair sharing - Simon Gaechter (Department of Economics, University of Nottingham.); Leonie Gerhards (Department of Economics, University of Hamburg); Daniele Nosenzo (Department of Economics, University of Nottingham.) 

WA burgeoning literature in economics has started examining the role of  social norms in explaining economic behavior. Surprisingly, the vast majority  of this literature has studied social norms in asocial decision settings,  where individuals are observed to act in isolation from each other. In this  paper we use a large-scale dictator game experiment (N = 850) to show that  the presence of “peers†in the decision setting faced by an individual can  have a profound influence on the individual’s perception of the decision  situation and its underlying norms of sharing, as elicited in an incentive  compatible way. However, we find limited evidence that this influence of  peers in normative considerations translates into a corresponding effect in  actual behavior. Partly, this is due to substantial heterogeneity in the  extent to which dictators in our sample are willing to comply with norms of  fair sharing.

    Keywords: social norms, norm compliance, peer effects, fair sharing,

     dictator game, framing, experiments

URL: http://d.repec.org/n?u=RePEc:not:notcdx:2015-23&r=soc

 7. Informal versus Formal Search: Which Yields a Better Pay? Tumen, Semih (Central Bank of Turkey) 

Estimates on the effect of job contact method – i.e., informal versus formal  search – on wage offers vary considerably across studies, with some of them  finding a positive correlation between getting help from informal connections  and obtaining high-paying jobs, while others finding a negative one. In this  paper, I theoretically investigate the sources of discrepancies in these  empirical results. Using a formal job search framework, I derive an  equilibrium wage distribution which reveals that the informal search yields  for some groups higher and for some others lower wages than formal search.

 The key result is the existence of nonmonotonicities in wage offers. Two  potential sources of these nonmonotonicities exist: (i) peer effects and (ii)  unobserved worker heterogeneity in terms of the inherent cost of maintaining  connections within a productive informal network. The model predicts that a  greater degree of unobserved heterogeneity tilts the estimates toward  producing a positive correlation between informal search and higher wages,  whereas stronger peer influences tend to yield a negative correlation. This  conclusion informs the empirical research in the sense that identification of  the true correlation between job contact methods and wage offers requires a  careful assessment of the unobserved heterogeneity and peer influences in the  relevant sample.

    Keywords: heterogeneity, peer effects, informal networks, job search,

     nonmonotonicities

    JEL: D85 J31 J64

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9573&r=soc

 8. The Problem with All-or-nothing Trust Games: What Others Choose Not to Do Matters In Trust-based Exchange - Schniter, Eric; Sheremeta, Roman; Shields, Timothy

 Many economic interactions are characterized by “all-or-nothing” action  spaces that may limit the demonstrability of intended trust. We investigate  whether restricting investment opportunities to all-or-nothing options  affects the investment rate and propensity to reciprocate. We do this by  manipulating the investor’s action space in two versions of the trust game.

 In the all-or-nothing game the investor can invest either $10 (all) or $0  (nothing), while in the continuous game the investor can invest any amount  between $10 and $0. In both games, the trustee receives the tripled  investment and then can return any amount to the investor. Results indicate  that investments are higher in the all-or-nothing game than in the continuous  game. However, higher investments in the all-or-nothing game do not lead to  higher returns. To the contrary, conditional on $10 investments, on average  trustees return less in the all-or-nothing game. Although the all-or-nothing  action space results in greater wealth overall, it also appears to “backfire” for investors who do not benefit from the increased wealth. These results  support the proposition that humans perceive intentions not only by  evaluating what others do but also by evaluating what others choose not to do.

    Keywords: trust game, demonstrability, intentions, reciprocity, experiment

    JEL: C72 C91

URL: http://d.repec.org/n?u=RePEc:pra:mprapa:68561&r=soc

 9. Tax Evasion Revised: Surprising Experimental Evidence on the Role of Principal Witness Regulations and Differences in Gender Attitudes - Luigi Mittone; Johannes Buckenmaier; Eugen Dimant

 This paper experimentally investigates indirect tax evasion that requires the  cooperation of an intermediary. We explore the effectiveness of the  introduction of a principal witness regulation as a means to facilitate tax  compliance. Reactions show a significant drop in tax compliance that,  surprisingly, is vastly different across gender with the effect being mainly  driven by women. As a result, women decrease their tax compliance  significantly reaching an even lower level than men who in turn do not react  to the institutional change.

    Keywords: indirect tax evasion, gender difference, contextual sensitivity,

     reciprocity, principal witness regulation

    JEL: D03 D73 D81 H26

URL: http://d.repec.org/n?u=RePEc:trn:utwpce:1505&r=soc

10. Money and the Scale of Cooperation - M. Bigoni, G. Camera, M. Casari

 This study reveals the existence of a causal link between the availability of  money and an expanded scale of interaction. We constructed an experiment  where participants chose the group size, either a low-value partnership or a  high-value group of strangers, and then faced an intertemporal cooperative  task. Theoretically, a monetary system was inessential to achieve  cooperation. Empirically, without a working monetary system, participants  were reluctant to expand the scale of interaction; and when they did, they  ended up destroying surplus compared to partnerships, because cooperation  collapsed in large groups. This economic failure was reversed only when  participants managed to concurrently develop a stable monetary system.

    JEL: C70 C90 D80

URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp1045&r=soc

11. Gender, beauty and support networks in academia: evidence from a field experiment - Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw), Magdalena Smyk (Faculty of Economic Sciences, University of Warsaw)

Bibliometric studies show that male academics are more productive than their  female counterparts and that the gap cannot be explained in terms of  difference in abilities. In this project we wish to verify the hypothesis  that this tendency is related to the greater support that men receive from  their colleagues (“old boys network”). Towards this end we had e-mails sent  by a male or female student asking academics for a minor favour. In Study 1  we asked authors of nearly 300 papers in experimental economics to share the  raw data used in their study. We observed no difference in response rate or  compliance rate between male and female senders. In Study 2 we sent 2775  e-mails to academics affiliated with prestigious schools from ten different  fields , asking to either send us a copy of their recent article or meet the  sender supposedly interested in pursuing a PhD program. Once again we  manipulated gender of the senders but this time we also varied their physical  attractiveness. We found a small but significant difference in the Article Treatment: attractive females’ requests were honoured less often. No such  tendency was found in the Meeting Treatment and no general gender effect was  observed. Overall, we find very little support for the claim that early-stage  male researchers enjoy greater support than their female colleagues.

    Keywords: gender, beauty, women in academia, field experiment

    JEL: J16 C93

URL: http://d.repec.org/n?u=RePEc:war:wpaper:2015-43&r=soc

12. Destructive intergenerational altruism - Asheim, Geir B. (Dept. of Economics, University of Oslo); Nesje, Frikk (Dept. of Economics, University of Oslo) 

Are the probable future negative effects of climate change an argument for  decreasing the discount rate to promote the interests of future generations?

 The analysis of the present paper suggests that such stronger  intergenerational altruism might undermine future wellbeing if not  complemented by collective climate action. In the standard one-sector model  of economic growth normatively attractive outcomes will be implemented if  each generation has sufficient altruism for its descendants. This conclusion  is radically changed in a two-sector model where one form of capital is more  productive than the other, but leads to negative atmospheric externalities.

 In fact, the model shows that, if each dynasty is trying to get ahead in a  world threatened by climate change by increasing its intergenerational  altruism, then long-term wellbeing will be seriously undermined.

    Keywords: Intergenerational altruism; climate change.

    JEL: D63 D64 D71 Q01 Q54

URL: http://d.repec.org/n?u=RePEc:hhs:osloec:2015_022&r=soc

13. Do They Find You on Facebook? Facebook Profile Picture and Hiring Chances - Baert, Stijn (Ghent University)

 We investigate whether the publicly available information on Facebook about  job applicants affects employers' hiring decisions. To this end, we conduct a  field experiment in which fictitious job applications are sent to real job  openings in Belgium. The only characteristic in which these candidates differ  is the unique Facebook profile that can be found online with their name.

 Candidates with the most beneficial Facebook picture obtain approximately 39%  more job interview invitations compared to candidates with the least  beneficial picture. In addition, we find suggestive evidence for a higher  effect of Facebook profile picture appearance on hiring chances when  candidates are highly educated and when recruiters are female.

    Keywords: hiring, screening, Facebook, Internet, personality,  attractiveness

    JEL: C93 D83 J24 J79 L86

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9584&r=soc

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