98235 - SOCIAL NORMS, CULTURE AND ECONOMIC DECISION-MAKING

Learning outcomes

Students who successfully complete this course should be able to:

 

• Identify and describe major economic models of social preferences and discrimination
• Explain what is meant by "social capital", and how it can influence economic outcomes
• Discuss the relationship between culture and economic development
• Critically read and assess academic studies in economics
• Understand simple research methods in experimental economics

Course contents

Individuals often deviate from the selfish utility-maximization assumed in classical microeconomics. We give gifts to friends, donate to charity, and turn out to vote. We also discriminate against minorities, engage in feuds, and ostracize outsiders. This course examines how social norms and culture can affect economic decision-making in these and other contexts. We will start by introducing models and empirical evidence of social preferences - concepts such as altruism, fairness, and reciprocity. We will then consider how social capital can stimulate economic growth, before turning to an example of negative social interactions - labor market discrimination. Finally, the course will discuss how culture has
shaped long-run economic growth.

Readings/Bibliography

Rough course outline and example readings:

1. Social components to economic decision-making

- J. Chapman, M. Dean, P. Ortoleva, E. Snowberg, and C.
Camerer. Econographics. Technical report, National Bureau of Economic Research, 2018.

2. Models of social preferences
 - G. Charness and M. Rabin. Understanding social preferences with simple tests. The Quarterly Journal of Economics, 117(3):817-869, 2002.

3. Gift-giving and charity
- S. DellaVigna, J. A. List, and U. Malmendier. Testing for altruism and social pressure in charitable giving. The Quarterly Journal of Economics, 127(1):1-56, 2012.

4. What is social capital? 

- J. Sobel. Can we trust social capital? Journal of economic literature, 40(1):139-154, 2002.

5. Social capital and economic development
- S. Knack and P. Keefer. Does social capital have an economic payoff? a cross-country investigation. The Quarterly Journal of Economics, 112(4):1251-1288, 1997.

6. Networks and social capital
- M. Granovetter. Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3):481-510, 1985.

7. Theories of discrimination
- K. K. Charles and J. Guryan. Studying discrimination: Fundamental challenges and recent progress. Annual Review of Economics, 3(1):479-511, 2011.

8. Gender differences in behavior and labor market outcomes

- M. Niederle and L. Vesterlund. Gender and competition. Annual Review of Economics, 3(1):601-630, 2011.

9. Culture and cultural transmission

-R. Fernanandez. Does culture matter? Handbook of Social Economics, 1:481-510, 2011.

10. Culture, political institutions, and economic growth 

- G. Clark. Why isn't the whole world developed? Lessons from the cotton mills. Journal of Economic History, 47(01):141-173, 1987.

Teaching methods

The class will be conducted in English.

Each class will consist of a lecture part and a discussion part.

Lectures will be focused on explaining theoretical ideas. In the discussion part, students will be asked to present a reading to the class (either individually or in groups depending on class size). 

Assessment methods

The final assessment will be based on:

1. Class attendance and contribution to classroom discussion: 8/30.

2. Presentation, slides, and lecture notes: 10/30. Students will
be asked to present a reading to the class, (either individually or in groups depending on class size). They should also provide lecture notes summarizing the piece to be distributed to students. At the end of the presentation, presenters should pose questions to the audience to serve as the basis for discussion.

3. Research proposal: 12/30. Students will be placed into small groups to develop a research proposal. The research proposal should include a detailed literature review and a proposed research design.

Office hours

See the website of Jonathan Neil Chapman