The socially embedded individual

Li, Xueheng (2018) The socially embedded individual. PhD thesis, University of Nottingham.

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This thesis contains three studies. They are connected by the idea that "no man is an island": each individual contributes to shaping, and is constrained by, the social and economic structures of the organization or the society that the individual is embedded in.

The first study, Chapter 2, examines optimal networks with weighted and directed links under complementarities. A group of agents take actions that are endogenously determined by which network the planner implements. Complementarities mean that the best-response action of each agent is increasing in the actions of those who have a link with positive weight pointing to the agent (representing the direction and intensity of influence). Optimal networks are those maximizing the planner's objective function which is an increasing function in the effort of each agent, subject to the constraint that the total weight of the links of the network does not exceed a certain level. The agents' best-response function and the planner's objective function can be convex or concave. We show that every optimal network exhibits dramatic concentration of influence so that a very small number of agents impose significant impact on the productivity of the whole organization.

The second study, Chapter 3, investigates how cooperative norms emerge and evolve over time. I construct a stochastic dynamic model based on the idea that cooperation in one-shot interactions is sustained by endogenous social norms. The model shows how cooperation and punishment of defectors co-evolve. It reveals the conditions under which cooperation emerges and persists in the long run. In particular, recent empirical studies find that cooperation in one-shot interactions is positively correlated with law enforcement across societies, and that cooperation is higher in large, modern societies with higher degrees of market integration compared to small-scale societies. I extend the model to explain these regularities. I show that the ability to “vote with feet” is the key to understanding the difference in cooperation between small-scale societies and large, modern societies.

The third study, Chapter 4, is an experimental project, a joint work with Lucas Molleman and Dennie van Dolder. Previous studies suggest that whether individuals perceive a behavior as fair depends on its frequency in the population. Using a prisoner's dilemma game, we test experimentally whether informing individuals of a higher proportion of cooperators in the population affects the fairness perception about free riding and changes individuals' punishment of free riders. Different from previous studies, we use the strategy method to obtain each participant's complete punishment strategy. We find a remarkable heterogeneity among participants: some participants increase punishment of free riders as the proportion of cooperators increases, suggesting that they consider free riding to be more unfair when more cooperators are around; yet, many others punish independently of the proportion of cooperators. We show that the heterogeneity cannot be captured by any single existing theory.

Item Type: Thesis (University of Nottingham only) (PhD)
Supervisors: Barr, Abigail
Sonderegger, Silvia
Keywords: Industrial management; Industrial productivity; Fairness; Cooperation; Organizational behavior
Subjects: H Social sciences > HD Industries. Land use. Labor
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
Item ID: 51300
Depositing User: Li, Xueheng
Date Deposited: 18 Jul 2018 04:40
Last Modified: 07 May 2020 18:46

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