In this issue we feature 11 current papers on the theme of social capital:

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1. Social trust, workplace organization, and the comparative advantage of nations - van Hoorn, Andre
2. Tragedy of the Commons and Evolutionary Games in Social Networks: The Economics of Social Punishment - Jorge Marco; Renan Goetz
3. Disentangling trust from risk-taking: Triadic approach - Sonsino, Doron; Shifrin, Max; Lahav, Eyal
4. The Causal Impact of Social Connections on Firms' Outcomes - Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar
5. Social capital and conflict: impact and implications - Aghajanian, Alia Jane
6. On the social inappropriateness of discrimination - Abigail Barr; Tom Lane; Daniele Nosenzo
7. Explaining Central Bank Trust in an Inflation Targeting Country: The Case of the Reserve Bank of New Zealand - Bernd Hayo; Florian Neumeier
8. Spillovers, Persistence and Learning: Institutions and the Dynamics of Cooperation - Galbiati, Roberto; Henry, Emeric; Jacquemet, Nicolas
9. Volunteering under Population Uncertainty - Adrian Hillenbrand; Fabian Winter
10. Warm-Glow Giving in Networks with Multiple Public Goods - Lionel Richefort
11. Caregivers in the Family: Daughters, Sons and Social Norms - Barigozzi, Francesca; Cremer, Helmuth; Roeder, Kerstin

 1. Social trust, workplace organization, and the comparative advantage of nations

    van Hoorn, Andre

 In this paper, I consider a specific channel through which trust between  parties to an exchange can go on to affect nations’ comparative advantage in  certain industries. My approach revolves around the autonomy that employers (principals) grant to workers (agents), which is a key feature of workplace  organization. I hypothesize that social trust generates a comparative  advantage in industries with more autonomous micro production environments. I  employ individual-level data on work autonomy to construct a measure of the  extent to which industries are characterized by autonomy in the production  process. Results of a cross-country cross-industry analysis confirm that  countries with higher levels of social trust have a comparative advantage in  high-autonomy industries and vice versa. Results are robust to the  possibility of reverse causality. The paper’s key contribution is to provide  a link between the microeconomic literature on workplace organization and the  comparative macroeconomic literature on social trust.

    Keywords: Social capital; work autonomy; comparative economic development; division of labor; comparative advantage; organizational design; culture

    JEL: D23 L23 M54 O43 O57 P50 Z10

URL: http://d.repec.org/n?u=RePEc:pra:mprapa:80017&r=soc

 2. Tragedy of the Commons and Evolutionary Games in Social Networks: The Economics of Social Punishment

    Jorge Marco (University of Girona)

    Renan Goetz (University of Girona)

This study revisits the problem of the tragedy of the commons. Extracting  agents participate in an evolutionary game in a complex social network and  are subject to social pressure if they do not comply with the social norms.

Social pressure depends on the dynamics of the resource, the network and the  population of compliers. We analyze the influence the network structure has  on the agents’ behavior and determine the economic value of the intangible  good - social pressure. For a socially optimal management of the resource, an  initially high share of compliers is necessary but is not sufficient. The  analysis shows the extent to which the remaining level of the resource, the  share of compliers and the size, density and local cohesiveness of the  network contribute to overcoming the tragedy of the commons. The study  suggests that the origin of the problem – shortsighted behavior - is also the  starting point for a solution in the form of a one-time payment. A numerical  analysis of a social network comprising 7500 agents and a realistic  topological structure is performed using empirical data from the western La  Mancha aquifer in Spain.

    Keywords: Tragedy of the Commons, Cooperation, Evolutionary Game, Social Network, Social Punishment

    JEL: C71 D85 Q25

URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2017.35&r=soc

 3. Disentangling trust from risk-taking: Triadic approach

    Sonsino, Doron

    Shifrin, Max

    Lahav, Eyal

The willingness to trust human receivers is compared to the inclination to  take lottery risk in six distinct scenarios, controlling the return  distributions. Trust shows significantly smaller responsiveness to return  expectations compared to parallel pure-risk lottery allocation, and paired  comparisons reveal that investors sacrifice 5% of the expected payoff to  trust anonymous receivers. Trust is more calculated and volatile for males,  while appearing relative stable for females. The results complement the  accumulating evidence regarding physiological differences between trust and  risk, in addition suggesting that the trust-risk gap is larger for females.

    Keywords: Trust, risk, gender, ambiguity, betrayal aversion

    JEL: C72 C90 D80

URL: http://d.repec.org/n?u=RePEc:pra:mprapa:80095&r=soc

 4. The Causal Impact of Social Connections on Firms' Outcomes

    Eliason, Marcus

    Hensvik, Lena

    Kramarz, Francis

    Nordstrom Skans, Oskar

The paper studies how social connections affect firm-level hiring decisions  and performance. We use register data to characterize the social connections  of firms' employees. For causal identification, we use displacements which  create directed supply shocks towards the firms of the displaced workers' social connections. We make sure that our results are fully driven by these  directed supply shocks. Results show that firms appear to prefer employed  workers they are connected to over unconnected or unemployed workers when  hiring. The employed and connected mostly go to high-productivity firms  whereas the unemployed and unconnected tend to go to low-productivity firms.

Strong connections - family, recent, durable, formed in small groups, between  socially similar agents - matter the most. Displacements shocks cause  connected firms, in particular low-productivity ones, to hire those workers  they are connected to. Unconnected hires and separations are essentially  unaffected. These supply shocks therefore cause the creation of additional  jobs which increase firms' employment. In addition, we use these shocks to  show that hiring connected workers has a positive causal impact on firm  performance. These results are consistent with a stylized framework where  connections reduce hiring frictions and where the firm-level possibility to  hire connected workers is a function of changing outside options of these  workers.

    Keywords: job creation; Job Displacement; job search; networks

    JEL: J23 J30 J60

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:12135&r=soc

 5. Social capital and conflict: impact and implications

    Aghajanian, Alia Jane

This thesis explores the relationship between social capital and conflict in  two different contexts, by answering the following two questions: How does  exposure to violence affect social capital in urban Maharashtra, India? How  does returning home affect social capital amongst internally displaced  persons and returnees from Nahr el Bared camp in North Lebanon?

This thesis  then goes on to look at the labour market implications of returning home to  Nahr el Bared camp, exploring the role of social capital (amongst other mechanisms) in this relationship. The following paragraphs are abstracts from  the three empirical chapters that address these questions. The first  empirical chapter explores the relationship between exposure to riots and  social capital in urban Maharashtra. We exploit a panel dataset collected by  the authors and apply a random effects model with lagged covariates to  estimate an exogenous relationship between neighbourhood exposure to riots  and four forms of social capital: membership in a group or organisation,  trust in neighbours, participation in community discussions and participation  in community festival preparations. Consistent with Bellows and Miguel's  study of conflict and social capital (2009), we find that households living  in neighbourhoods that experienced a riot are more likely to be members of  groups and organisations. On the other hand, we find that these households  are less likely to join community discussions, which lends more to the  hypothesis of fragmented post-conflict societies with a damaged social fabric  (Colletta and Cullen, 2000).

We explore various mechanisms behind these  results and find that the increased membership in organisations is greatest  in diverse neighbourhoods that have not experienced recent changes in  composition. However, riots reduce trust and the likelihood of participation  in fragmented and polarised riot-affected neighbourhoods. Riots also decrease  participation in festival preparations in neighbourhoods where out-migration  has been low.

Our analysis suggests that individuals and households  instrumentally use social capital to their advantage, a type of insurance to  protect against potential communal violence in the future. However, riots can  have adverse affects on different forms of social capital that go beyond the  surface level of social networking to feelings of trust and sense of  community. The second empirical chapter studies the effect of returning home  after conflict induced displacement on social capital, compared to remaining  displaced. I have collected a household survey of displaced Palestinians from  a refugee camp in Lebanon, and this chapter assesses the impact of return on  the different dimensions of social capital based on a diverse and rich set of  questions.

An instrumental variable is used to model the return decision in  one part of the camp, and the exogenous nature of return is exploited in  another section of the camp. Results show that return can improve social  capital if households return within one year of the war ending and with their  friends and family. If households have been displaced for too long, then  social capital is decreased upon returning home. This indicates that social  capital is not simply carried over from displacement to return, but is  rebuilt in a process that takes time and effort. The third and final  empirical chapter studies the effect of returning home on labour market  outcomes.

Theoretically the effect of return is ambiguous, depending on  changes in both the demand and supply of labour. I empirically study the  effect of return on four labour market outcomes: participation in the labour  force, working, wages and number of days worked. I analyse a dataset of  individuals originally from Nahr el-Bared camp in North Lebanon, displaced  within Lebanon after a war in 2007 between the Lebanese army and Fatah  al-Islam. I use an instrumental variable and exploit the exogenous nature of  the return process in order to estimate a causal effect of return. The  results show that return increases the likelihood of working by 117  percentage points. This effect is greatest for those who have returned within  two years, reaping the benefits of greater aggregate demand as the market  increases. Women returnees are more likely to be working compared to the  displaced, but there is no difference in employment between men who have been  displaced and those who have returned. This could be because women possess  skills that are adaptable in labour markets, working in cottage type  industries from home, as opposed to the more specialised skills that men tend  to possess.

URL: http://d.repec.org/n?u=RePEc:sus:susphd:0116&r=soc

 6. On the social inappropriateness of discrimination

    Abigail Barr (School of Economics, University of Nottingham)

    Tom Lane (Nottingham University Business School, Ningbo, China)

    Daniele Nosenzo (School of Economics, University of Nottingham) 

We experimentally investigate the relationship between discriminatory  behaviour and the perceived social inappropriateness 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 less socially inappropriate 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 moderates discriminatory behaviour.

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

URL: http://d.repec.org/n?u=RePEc:not:notcdx:2017-11&r=soc

 7. Explaining Central Bank Trust in an Inflation Targeting Country: The Case of the Reserve Bank of New Zealand

    Bernd Hayo (University of Marburg)

    Florian Neumeier (Ifo Institute–Leibniz Institute for Economic Research at the University of Munich)

 Employing data from a representative population survey conducted in New  Zealand in 2016, this paper examines factors that influence, or are at least  associated with, public trust in the Reserve Bank of New Zealand (RBNZ). The  large number of specifically designed questions allows studying the  relationship between six dimensions and RBNZ trust: (i) economic situation,

 (ii) monetary policy knowledge, (iii) nonspecific trust, (iv) interest and  information search, (v) politicians and government, and (vi)  socio-demographic indicators. Using ordered logit models, we find that at  least one indicator from each of these six dimensions has a statistically  significant conditional correlation with individuals’ trust in RBNZ.

 Satisfaction with own financial situation, objective knowledge about the  RBNZ’s main policy objective, responsibility for interest rate setting,  subjective knowledge about inflation, trust in government institutions,  desire to be informed about RBNZ, age, and full-time selfemployment have a  positive relationship with RBNZ trust. The reverse is found for respondents  who do not keep up with RBNZ and believe that politicians are long-term  oriented. In terms of economic relevance, institutional trust has the largest  single impact on RBNZ trust and the subjective and objective knowledge  indicators show a strong combined influence.

    Keywords: Central Bank Trust, Survey, Public Attitudes, Reserve Bank of New Zealand, Monetary Policy

    JEL: E52 E58 Z1

URL: http://d.repec.org/n?u=RePEc:mar:magkse:201728&r=soc

 8. Spillovers, Persistence and Learning: Institutions and the Dynamics of Cooperation

    Galbiati, Roberto

    Henry, Emeric

    Jacquemet, Nicolas

 We study how cooperation-enforcing institutions dynamically affect values and  behavior using a lab experiment designed to create individual specific  histories of past institutional exposure. We show that the effect of past  institutions is mostly due to "indirect" behavioral spillovers: facing  penalties in the past increases partners' cooperation in the past, which in  turn positively affects ones' own current behavior. We demonstrate that such  indirect spillovers induce persistent effects of institutions. However, for  interactions that occur early on, we find a negative effect of past  enforcement due to differential learning under different enforcement  institutions.

    Keywords: Cooperation; experiments.; Laws; learning; persistence of institutions; repeated games; social values; Spillovers

    JEL: C73 C91 D02 K49 P16 Z1

URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:12128&r=soc

 9. Volunteering under Population Uncertainty

    Adrian Hillenbrand (Max Planck Institute for Research on Collective Goods)

    Fabian Winter (Max Planck Institute for Research on Collective Goods)  There is ample evidence that the number of players can have an important  impact on the cooperation and coordination behavior of people facing social  dilemmas. With extremely few exceptions, the literature on cooperation  assumes common knowledge about who is a player and how many players are  involved in a certain situation. In this paper, we argue that this assumption  is overly restrictive, and not even very common in real-world cooperation  problems. We show theoretically and experimentally that uncertainty about the  number of players in a Volunteer's Dilemma increases cooperation compared to  a situation with a certain number of players. We identify additional  behavioral mechanisms amplifying and impairing the effect.

URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_12&r=soc

10. Warm-Glow Giving in Networks with Multiple Public Goods

    Lionel Richefort (Université de Nantes, LEMNA)  This paper explores a voluntary contribution game in the presence of  warm-glow effects. There are many public goods and each public good benefits  a different group of players. The structure of the game induces a bipartite  network structure, where players are listed on one side and the public good  groups they form are listed on the other side. The main result of the paper  shows the existence and uniqueness of a Nash equilibrium. The unique Nash  equilibrium is also shown to be locally asymptotically stable. Then the paper  provides some comparative statics analysis regarding pure redistribution,  taxation and subsidies. It appears that small redistributions of wealth may  sometimes be neutral, but generally, the effects of redistributive policies  depend on how public good groups are related in the contribution network  structure.

    Keywords: Multiple Public Goods, Warm-glow Effects, Bipartite Contribution Structure, Nash Equilibrium, Comparative Statics

    JEL: C72 D64 H40

URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2017.32&r=soc

11. Caregivers in the Family: Daughters, Sons and Social Norms

    Barigozzi, Francesca (University of Bologna)

    Cremer, Helmuth (Toulouse School of Economics)

    Roeder, Kerstin (University of Augsburg) 

Daughters are the principal caregivers of their dependent parents. In this  paper, we study long-term care (LTC) choices by bargaining families with mixed- or same-gender siblings. LTC care can be provided either informally by  children, or formally at home or in an institution. A social norm implies  that daughters suffer a psychological cost when they provide less informal  care than the average child. We show that the laissez-faire (LF) and the  utilitarian first-best (FB) differ for two reasons. First, because informal  care imposes a negative externality on daughters via the social norm, too  much informal care is provided in LF. Second, the weights children and  parents have in the family bargaining problem might differ in general from  their weights in social welfare. We show that the FB allocation can be  achieved through a system of subsidies on formal home and institutional care.

Except when children and parents have equal bargaining weights these  subsidies are gender-specific and reflect Pigouvian as well as  "paternalistic" considerations.

    Keywords: social norms, formal and informal LTC, daughters, sons

    JEL: D13 H23 H31 I19

URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10862&r=soc

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