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NEP: New Economics Papers - Social Norms and Social Capital - Digest, Vol 54, Issue 1

In this issue we feature 9 current papers on the theme of social capital:

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In this issue we have:

1. Culture of Trust and Division of Labor - Meier, Stephan; Stephenson, Matthew

2. Social capital and the cost of credit: evidence from a crisis - Paolo Emilio Mistrulli; Valerio Vacca

3. Culture, Institutions and Democratization - Gorodnichenko, Yuriy; Roland, Gérard

4. Strong intrinsic motivation - Dessi, Roberta; Ristichini, Aldo

5. The Impact of Social Information on the Voluntary Provision of Public Goods: A Replication Study -James J. Murphy; Nomin Batmunkh; Ben Nilsson; Samantha Ray

6. Conspicuous Work: Peer Working Time, Labour Supply and Happiness for Male Workers - Collewet, Marion; de Grip, Andries; de Koning, Jaap

7. Comparison of Social Capitalfs Effect on Consideration of Suicide between Urban and Rural Areas - Eiji Yamamura

8. Pricing in Social Networks under Limited Information - Elias Carroni; Simone Righi

9. Deconstructing Giving: Donor Types and How They Give - Lata Gangadharan; Philip J. Grossman; Kristy Jones

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1. Culture of Trust and Division of Labor
   Meier, Stephan (Columbia University)
   Stephenson, Matthew (Columbia University)  Firms exhibit heterogeneity in size, productivity, and internal structure,  and this is true even within the same industry. It has been thought since the  time of Adam Smith that a firm's internal structure affects its productivity  through the channel of gains from specialization. Our paper provides evidence  of a link between an organization's culture – specifically the trust  environment – and its internal structure. We show experimentally that  exogenously imposed culture endogenously leads to variation in organizational  form. We prime trust using past performance from a pilot study and  demonstrate that the level of trust within an organization affects division  of labor and consequently organizational productivity. This evidence is  consistent with a cross-country link between trust and the division of labor  that we observe in data from the European Social Survey. Our results point to  a mechanism that can help explain existing results on the connection between  generalized trust and growth. It also points to an important determinant of a  firm's internal structure: corporate culture (of trust).
   Keywords: trust, division of labor, organizational structure
   JEL: C90 D20 D03
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8974&r=soc

2. Social capital and the cost of credit: evidence from a crisis
   Paolo Emilio Mistrulli (Bank of Italy)
   Valerio Vacca (Bank of Italy)
 Social capital is a key factor affecting the functioning of financial markets  (Guiso, Sapienza and Zingales, 2004). However, the estimation of the effect  of social capital on credit markets is notoriously difficult. In this paper  we exploit the recent Lehman Brothers crisis and a rich dataset to  investigate whether social capital shields firms from the tightening of  credit conditions. We mainly focus on lending to small Italian firms that  rely almost exclusively on banks’ credit and we compare the level of loan  interest rates before (June 2008) and after (June 2010) Lehman’s default for  a balanced sample of bank-firm relationships. We find that for firms  headquartered in provinces where social capital is higher, the rise in the  loan spreads following Lehman’s default was milder compared to firms located  in low-social capital communities. The benefits were larger for small firms  borrowing from more than one bank and for uncollateralised credit but did not  extend to larger firms. Moreover, different measures of social capital  provide slightly different results, suggesting a more ambiguous role for  particularistic networking (e.g. having a wide network of friends) than for  altruistic behaviour rooted in universalistic ethics. Finally, the propensity  of a community to cooperate in the credit market, a kind of credit-specific  measure of networking, did not always have an impact comparable to that for  more general measures of social capital.
   Keywords: social capital, trust, SME finance, credit cooperation, financial
    crises
   JEL: A13 G01 G2
URL: http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1009_15&r=soc

3. Culture, Institutions and Democratization
   Gorodnichenko, Yuriy
   Roland, Gérard
 We construct a model of revolution and transition to democracy under an  individualistic and a collectivist culture. The main result is that, despite  facing potentially larger collective action problems, countries with an  individualistic culture are more likely to end up adopting democracy faster  than countries with a collectivist culture. Our instrumental variable  estimation suggests a strong and robust effect of individualistic culture on  average polity scores and length of democracy, even after controlling for  other determinants of democracy emphasized in the literature. We also give  evidence that countries with collectivist culture are also more likely to  experience autocratic breakdowns and transitions from autocracy to autocracy.
   Keywords: collective action; collectivism; culture; democratization;
    individualism
   JEL: H1 P48 Z1
URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10563&r=soc

4. Strong intrinsic motivation
   Dessi, Roberta
   Ristichini, Aldo
 A large literature in psychology, and more recently in economics, has argued  that monetary rewards can reduce intrinsic motivation. We investigate whether  the negative impact persists when intrinsic motivation is strong, and test  this hypothesis experimentally focusing on the motivation to undertake  interesting and challenging tasks, informative about individual ability. We  find that this type of task can generate strong intrinsic motivation, that is  impervious to the effect of monetary incentives, particularly when the  individual is "racing against himself". In our experiments, monetary  incentives have no significant impact on performance. In a second experiment  using the same kind of task but a setting designed to weaken intrinsic  motivation, monetary incentives do have a significant, positive, effect on  performance. This result confirms that our experimental setup may, with  appropriate conditions, replicate the known crowding out effects.
URL: http://d.repec.org/n?u=RePEc:ide:wpaper:29268&r=soc

5. The Impact of Social Information on the Voluntary Provision of Public
    Goods: A Replication Study
   James J. Murphy (University of Alaska Anchorage, Nankai University, Chapman
    University)
   Nomin Batmunkh (University of Alaska Anchorage)
   Ben Nilsson (University of Alaska Anchorage)
   Samantha Ray (University of Alaska Anchorage)  Shang and Croson (2009) found that providing information about the donation  decisions of others can have a positive impact on individual donations to  public radio. In this study, we attempted to replicate their results,  however, we found no evidence of that social comparisons affected donation  decisions. Most of our donors were renewing members, a group which Shang and  Croson also found were not influenced by social information.
   Keywords: Charitable giving; field experiment; philanthropy; public goods;
    social information; social comparison
   JEL: D64 H41 C93
URL: http://d.repec.org/n?u=RePEc:chu:wpaper:15-08&r=soc

6. Conspicuous Work: Peer Working Time, Labour Supply and Happiness for Male
    Workers
   Collewet, Marion (Maastricht University)
   de Grip, Andries (ROA, Maastricht University)
   de Koning, Jaap (Erasmus University Rotterdam)  This paper uncovers 'conspicuous work' as a new form of status seeking that  can explain social interactions in labour supply. We analyse how peer working  time relates to both labour supply and happiness for Dutch male workers.
 Using a unique measure of peer weekly working time, we find that men's  working time increases with that of their peers and that peer working time is  negatively related to men's happiness. These findings are consistent with a  'conspicuous work' model, in which individuals derive status from working  time.
   Keywords: well-being, social norms, working hours
   JEL: J22 I31 D62
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp9011&r=soc

7. Comparison of Social Capitalfs Effect on Consideration of Suicide between
    Urban and Rural Areas
   Eiji Yamamura
 An increasing number of works have addressed the socio-economic determinants  of suicide. Social capital is a key factor in preventing suicide. However,  little is known about the experience of suicide consideration using  subjective values. From the viewpoint of suicide prevention, it is worth  examining how people think of suicide. This paper attempts to examine the  effect of social capital on suicide consideration based on individual-level  data from Japan. Furthermore, the paper compares the effect of social capital  between urban and non-urban areas. After controlling for various  socio-economic factors, the major findings are that both individual-level  social capital and social capital accumulated in onefs place of residence  reduce the probability that one will consider suicide. After dividing the  sample into urban and non-urban residents, the effect of social capital in  onefs place of residence for urban residents is remarkably larger than for  non-urban residents. In contrast, the effect of individual-level social  capital disappears for urban residents, while the effect persists for  non-urban residents. Overall, community-level social capital plays a more  important role in deterring suicide for urban residents.
URL: http://d.repec.org/n?u=RePEc:dpr:wpaper:0933&r=soc

8. Pricing in Social Networks under Limited Information
   Elias Carroni (CERPE, University of Namur)
   Simone Righi (University of Modena and Reggio Emilia)  We model the choices of a monopolist who faces a partially uninformed  population of consumers. She aims at expanding demand by exploiting his
 (limited) knowledge about consumers’ social network. She offers rewards to  current clients in order to induce them to activate their social network and  to convince peers to buy the product sold by the company. The program is  profitable provided that the monopolist faces a serious enough informational  problem and that the cost of investment in the social network is not  prohibitively high. Price for informed consumers is lowered by the  introduction of the reward compared to the benchmark where no program is run.
 There are no effects on the price charged to uninformed consumers. The offer  of bonuses affects individual incentives of informed people to share  information, determining a minimal degree condition for the costly investment  in the social network. The level of such threshold strongly depends on the  distribution of connections in the social network. In random networks,  roughly the most popular half of informed consumers invests, regardless of  network density. On the contrary, in scale-free networks the monopolist faces  a clear-cut decision between maximising margins (running a small referral
 program) and maximising demand (motivating many informed agents to  communicate). The optimal choice depends on the probability of observing  highly-connected individuals. In empirically observed scale-free networks,  the first alternative would be preferred, in line with real-world markets.
   Keywords: social networks, monopoly pricing, network-based pricing
URL: http://d.repec.org/n?u=RePEc:nam:wpaper:1503&r=soc

9. Deconstructing Giving: Donor Types and How They Give
   Lata Gangadharan
   Philip J. Grossman
   Kristy Jones
 We examine the extent to which individual donors are warm glow or altruistic  givers and whether this distinction motivates giving decisions, particularly  paternalism. Results from our experiment suggest that motivations for giving  are heterogeneous, ranging from pure altruism to impure altruism to pure warm  glow. Of 115 donors, in our setting 30 are purely altruistic givers, 36 are  impure givers and up to 17 could be considered pure warm-glow givers. We find  that donors are predominantly paternalistic, however the extent of  paternalism depends on the donor’s motivations for giving, with pure  warm-glow givers significantly less likely to be paternalistic.
   Keywords: Warm Glow; Altruism; Paternalism; Deconstructing giving
   JEL: C91 D64 H40
URL: http://d.repec.org/n?u=RePEc:mos:moswps:2014-53&r=soc

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