CAREER: The Evolution of Social Capital in Field Settings: Experimental Measurements and Agent-Based Models of Convention Evolution

Middlebury College, Middlebury VT

Investigators

Abstract

Traditionally economists have spent a lot of time studying the creation of capital. In particular, the profession has been interested in the creation of physical capital (e.g machinery and other productive assets) and human capital (e.g. education). However, as the study of economic issues becomes more interdisciplinary, investigators have become interested in how social forces (e.g. social norms) impact economic outcomes. For example, one might ask how does the social norm of fairness, a concept appearing in most cultures but differently in each culture, interacts with economic institutions to form outcomes? Historically, such questions have been largely ignored, but recent studies have begun accounting for the influence of social capital. At the core of this concept are those characteristics of individuals including trust, trustworthiness, reciprocity, and generosity that make economic activity possible when it is hard to write and enforce contracts. Social capital can be defined as a kind of interpersonal grease lubricating economic transactions, but is hard to measure. For example, what does it mean for one group to have twice as much trust as another? As a result, social capital has not so far been widely accepted as important by policy makers. My research seeks to: 1) develop new tools based on social-psychological experiments to make meaningful measurements of social capital; 2) undertake the measurement of social capital in five distinct field locations (Thailand, Vietnam, Japan, the United States, and Columbia) where participants are confronted with important economic dilemmas on a daily basis; and 3) investigate whether the decision rules used by people in important economic situations can be used in computer simulations to predict long-run behavioral patterns consistent with real economic outcomes. If so, such simulations would be useful for policy analyses that account for social capital.