NEP: New Economics Papers - Social Norms and Social Capital - Digest, Vol 129, Issue 2

In this issue we feature 5 current papers on the theme of social capital, chosen by Fabio Sabatini (Università degli Studi di Roma “La Sapienza”):

1. Trust and trustworthiness after negative random shocks Hernan Bejarano; Joris Gillet; Ismael Rodriguez-Lara

2. Relational Contracts and Trust in a High-Tech Industry Giacomo Calzolari; Leonardo Felli; Johannes Koenen; Giancarlo Spagnolo; Konrad O. Stahl

3. Faith and Assimilation: Italian Immigrants in the US Gagliarducci, Stefano; Tabellini, Marco

4. Family Ties, Geographic Mobility and the Gender Gap in Academic Aspirations Farré, Lídia; Ortega, Francesc

5. The Structure of Social Relations in the Community: An Empirical Analysis for Achieving Social and Economic Inclusion Tabuga, Aubrey D.; Cabaero, Carlos C.

6. The Cultural Roots of Firm Entry, Exit, and Growth Katharina Erhardt; Simon Haenni

7. Do in-group biases lead to overconfidence in performance? Experimental evidence Lia Q. Flores; Miguel A. Fonseca

8. Shifting Punishment on Minorities: Experimental Evidence of Scapegoating Bauer, Michal; Cahlíková, Jana; Chytilová, Julie; Roland, Gerald

1. Trust and trustworthiness after negative random shocks Hernan Bejarano (Center of Economics Research and Teaching, Economics Division (CIDE), Mexico.); Joris Gillet (Middlesex University, Business School.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.) We experimentally investigate the effect of a negative endowment shock that can cause inequality in a trust game. Our goal is to assess whether different causes of inequality have different effects on trust and trustworthiness. In our trust game, we vary whether there is inequality (in favor of the second mover) or not and whether the inequality results from a random negative shock (i.e., the outcome of a die roll) or exists from the outset. Our findings suggest that inequality causes firstmovers to send more of their endowment and second-movers to return more. However, we do not find support for the hypothesis that the cause of the inequality matters. Behavior after the occurrence of a random shock is not significantly different from the behavior in treatments where the inequality exists from the outset. Our results highlight the need to be cautious when interpreting the effects on trust and trustworthiness of negative random shocks in the field (such as natural disasters). Our results suggest that these effects are primarily driven by the inequality caused by the shock and not by any of the additional characteristics of the shock, like saliency or uncertainty. JEL: C91 D02 D03 D69 Keywords: Trust game, endowment heterogeneity, random shocks, inequality aversion, experimental economics. Date: 2021–08–01 URL: http://d.repec.org/n?u=RePEc:gra:wpaper:21/06&r=&r=soc

2. Relational Contracts and Trust in a High-Tech Industry Giacomo Calzolari; Leonardo Felli; Johannes Koenen; Giancarlo Spagnolo; Konrad O. Stahl We study how informal buyer-supplier relationships in the German automotive industry affect procurement. Using unique data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the mutual relationship, is associated with both higher quality of the automotive parts and more competition among suppliers. Yet both effects hold only for parts involving unsophisticated technology, not when technology is sophisticated. We rationalize these findings within a relational contracting model that critically focuses on changes in the bargaining power, due to differences in the costs of switching suppliers. JEL: D86 L14 L62 O34 Keywords: Relational Contracts, Hold-up, Buyer-Supplier Contracts, Bargaining Power Date: 2021–08 URL: http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2021_316&r=&r=soc

3. Faith and Assimilation: Italian Immigrants in the US Gagliarducci, Stefano (University of Rome Tor Vergata); Tabellini, Marco (Harvard Business School) Ethnic religious organizations are often blamed for slowing down immigrants' assimilation in host societies. This paper offers the first systematic evidence on this topic by focusing on Italian Catholic churches in the US between 1890 and 1920, when four million Italians had moved to America, and anti-Catholic sentiments were widespread. Relying on newly collected data on the presence of Italian Catholic churches across counties over time, we implement a difference-in-differences design. We find that Italian churches reduced the social assimilation of Italian immigrants, lowering intermarriage, residential integration, and naturalization rates. We provide evidence that both stronger coordination within the Italian community and negative stereotyping among natives can explain these effects. Yet, Italian churches had ambiguous effects on immigrants' economic outcomes, and increased literacy and ability to speak English among Italian children. JEL: J15 N31 Z12 Keywords: immigration, assimilation, religious organizations Date: 2021–07 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14567&r=&r=soc

4. Family Ties, Geographic Mobility and the Gender Gap in Academic Aspirations Farré, Lídia (University of Barcelona); Ortega, Francesc (Queens College, CUNY) This paper provides new evidence supporting that gender differences in post-graduate educational choices contribute to the glass ceiling in the labor market. We study the decision to pursue an advanced degree form an internationally renowned institution, which greatly facilitates access to top jobs. Relying on a unique dataset on applications to a highly selective program that provides merit-based graduate fellowships to Spanish students, we show that women apply for the fellowships at lower rates than observationally equivalent male graduates. We also implemented a large-scale survey on current college students and show that female college graduates have stronger family ties than males, which restricts their geographical mobility and has a negative effect on their educational aspirations. Importantly, the previous pattern is reversed in STEM fields: female graduates in STEM participate in the fellowship program at equal or higher rates than comparable males. In fact, we show that female STEM students originate from more educated families, have higher academic ability, and higher educational and earnings aspirations than women in other fields. JEL: J3 J7 Keywords: gender, post-graduate, fellowships, family ties, geographic mobility Date: 2021–07 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14561&r=&r=soc

5. The Structure of Social Relations in the Community: An Empirical Analysis for Achieving Social and Economic Inclusion Tabuga, Aubrey D.; Cabaero, Carlos C. This paper examines the extent of social deprivation, if any, among the poor and other segments of the community. Specifically, it aims to illustrate the characteristics of social networks that poor families have through social network analysis (SNA). It inquires on the questions – How are the poor situated within the community network? Are they isolated, excluded, or integrated? To examine social inclusion or exclusion, this study uses social relations data (i.e. kinship and friendship ties) gathered in 2016 on all households residing in a rural, fishing village in the Philippines. Its primary objective is to draw insights for developing or improving efforts towards social and economic inclusion of the poor. <p> Comments to this paper are welcome within 60 days from date of posting. Email publications at mail.pids.gov.ph. Keywords: Philippines, social inclusion, Social network analysis, social exclusion, inclusive development Date: 2020 URL: http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2020-49&r=&r=soc

6. The Cultural Roots of Firm Entry, Exit, and Growth Katharina Erhardt; Simon Haenni Can culture explain persistent differences in economic activity among individuals and across regions? A novel measure of cultural origin enables us to contrast the entrepreneurial activity of individuals located in the same municipality but whose ancestors lived just on opposite sides of the Swiss language border in the 18th century. Individuals with ancestry from the German-speaking side create 20% more firms than those with ancestry from the French-speaking side. These differences persist over generations and independent of the predominant culture at the current location. Yet, founders’ ancestry does not affect exit or growth of newly-founded firms. A model of entrepreneurial choice and complementary survey evidence suggest that the empirical patterns are mainly explained by differences in preferences, rather than skill. The results have sizable economic implications, accounting for 120,000 additional jobs over a period of 15 years. JEL: D22 L26 O12 Z10 Keywords: culture, entrepreneurship, natural experiment, spatial RDD Date: 2021 URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_9198&r=&r=soc

7. Do in-group biases lead to overconfidence in performance? Experimental evidence Lia Q. Flores (School of Economics and Management, University of Porto); Miguel A. Fonseca (Department of Economics, University of Exeter) Psychologists have long identified the tendency of humans to overestimate their skill relative to their peers (overplacement). We investigate whether this phenomenon is exacerbated by group affiliation: social identity theory predicts people evaluate in-group members more positively than out-group members, and we hypothesized that this differential treatment may result in greater overplacement when interacting with an out-group member. We tested this hypothesis with 301 US voters affiliated with either the Republican or Democratic party in the run-up to the 2020 Presidential election, a time when political identities were salient and highly polarized. We found there is a higher tendency for overplacement when faced with an out-group opponent than with an in-group opponent. Decomposition analysis suggests this difference is due to underestimating the opponent, as opposed to overestimating one's own performance to a higher degree. Moreover, any tendency to incur in overplacement is mitigated when faced with an opponent with the same political-identity relative to one with a neutral one. While group affiliation biases initial priors, such effect is unchanged when participants are asked to update their beliefs. JEL: D18 D91 Z1 C9 Keywords: overconfidence, belief updating, motivated beliefs, overplacement, social identity, political affiliation, competition Date: 2021–08–03 URL: http://d.repec.org/n?u=RePEc:exe:wpaper:2103&r=&r=soc

8. Shifting Punishment on Minorities: Experimental Evidence of Scapegoating Bauer, Michal (Charles University, Prague); Cahlíková, Jana (Max Planck Institute for Tax Law and Public Finance); Chytilová, Julie (Charles University, Prague); Roland, Gerald (University of California, Berkeley) This paper provides experimental evidence showing that members of a majority group systematically shift punishment on innocent members of an ethnic minority. We develop a new incentivized task, the Punishing the Scapegoat Game, to measure how injustice affecting a member of one's own group shapes punishment of an unrelated bystander ("a scapegoat"). We manipulate the ethnic identity of the scapegoats and study interactions between the majority group and the Roma minority in Slovakia. We find that when no harm is done, there is no evidence of discrimination against the ethnic minority. In contrast, when a member of one's own group is harmed, the punishment "passed" on innocent individuals more than doubles when they are from the minority, as compared to when they are from the dominant group. These results illuminate how individualized tensions can be transformed into a group conflict, dragging minorities into conflicts in a way that is completely unrelated to their behavior. JEL: C93 D74 D91 J15 Keywords: punishment, minority groups, inter-group conflict, discrimination, scapegoating, lab-in-field experiments Date: 2021–07 URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14608&r=&r=soc 

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