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This paper studies lying. An agent randomly picks a number from a known distribution. She can then report any number and receive a monetary payoff based only on her report. The paper presents a model of lying costs that generates hypotheses regarding behavior. In an experiment, we find that the highest fraction of lies is from reporting the maximal outcome, but some participants do not make the maximal lie. More participants lie partially when the experimenter cannot observe their outcomes than when the experimenter can verify the observed outcome. Partial lying increases when the prior probability of the highest outcome decreases. (JEL C91, D12, D90, Z13)

This paper examines how independent directors’ social capital, as measured by their social network, affects corporate fraud. We find that firms with well-connected independent directors are less likely to commit fraud, supporting our monitoring effect hypothesis. This result is robust to a battery of tests. Further analyses show that the effect is stronger for firms with a relatively poor legal environment, for firms whose independent directors face strong reputation incentives and when independent directors are audit committee members. Moreover, we explore a potential economic mechanism of the effect and observe that well-connected independent directors are associated with less absenteeism and more dissension. Overall, our findings suggest that independent directors’ social capital plays an important role in corporate governance.

Substantial and systematic cross-country variation in entrepreneurship rates has been found in various studies. We attempt to explain such differences focusing on the interaction between institutional factors and population psychological characteristics. Constitutional provisions supporting economic freedom are our measure of the institutional context, whereas we proxy psychological characteristics with a country's endowment of agency culture. We apply an IV-GMM treatment to deal with endogeneity to a data set comprising 86 countries over the period 2004-2013, and we control for de facto variables and other factors that are likely to influence entrepreneurship. Our results demonstrate that agency culture is indeed an important predictor of entrepreneurship and that this effect is moderated by constitutional provisions supporting economic freedom. In particular, the impact of agency culture on entrepreneurship becomes stronger as a country expands the constitutional protection of economic rights. [ABSTRACT FROM AUTHOR]

Despite conflicts between social and economic goals, contemporary US firms routinely depict such aims as synergistic. Analyzing 300 annual reports from a sample of 80 large US public firms between 1960 and 2010, we examine the rise of 'win–win' conceptions of corporate responsibility (CR), which include both the social benefits of economic activities and economic gains from social responsibility. Our findings support arguments that the rise of win–win ideology in large corporations is tied to the emergence of neoliberal governance in society. Indicators of firms' changing institutional context include financialization, numbers of non-profit organizations and voluntary regulation schemes. However, the macroeffect is mediated by firm attention to these institutional changes; mentions of external evaluations in annual reports are associated with higher levels of win–win ideology. The study contributes to institutional theories of the historical development of CR and to understanding heterogeneous organizational responses to societal-level institutional change. [ABSTRACT FROM AUTHOR]

Social interactions within neighborhoods, schools, and detention facilities are important determinants of criminal behavior. However, little is known about the degree to which neighborhood peers affect successful community reentry following incarceration. We measure the influence of social networks on recidivism by exploiting the fact that neighborhood peers may be locked up when a prisoner returns home. Using detailed arrest and incarceration data that include residential addresses for offenders, we find consistent and robust evidence that a former inmate is less likely to reoffend if more of their peers are held captive while they reintegrate into society. [ABSTRACT FROM AUTHOR]

The article analyzes the capability of enterprises and social enterprises (as reported by Borzaga and Fazzi (Le imprese sociali, Carocci Editore, Roma, 2011); as reported by Drapery (Comprendre l'économie social, Dunod, Paris 2007)) in promoting local sustainable development, starting from the organization of alternative agro-food networks Renting et al. (Environ Plann 35:393–411, 2003). The analysis starts from a case study of 40 solidarity purchasing groups of solidarity economy in Italy. In particular, the article focuses on the solidarity economic network "REES Marche". Meanwhile, solidarity purchasing groups (SPGs) in the literature have been studied under the perspective of consumers, even those of the Marche Orazi (DES.so. Economia solidali e cittadini consapevoli, Cattedrale, Ancona, 2011), this article means to go ahead underlining also the perspective of producers. The analysis of data raises up 4 types of possible organizations linked to solidarity purchasing groups, with different levels of social innovation in promoting a sustainable development. Results show that a sustainable local development is enhanced by a thick social cooperation among enterprises into a network, as, for example, that of SPGs. Moreover, it is promoted by a reorganization of the productive chain on local, ecological and ethical basis that directly impacts on production and consumption of fair products. Furthermore, the article shows that the direct relationship among entrepreneur and consumers stimulates a social innovation in solving problems. We use a mixed method approach: a quantitative analysis of statistical data on the web site of REES Marche; a qualitative analysis based on participatory observation and on data collected through 34 in-depth interviews with network's members. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic has not only caused millions to die and even more to lose their jobs, it has also prompted more governments to simultaneously declare a state of emergency than ever before enabling us to compare their decisions more directly. States of emergency usually imply the extension of executive powers that diminishes the powers of other branches of government, as well as to the civil liberties of individuals. Here, we analyze the use of emergency provisions during the first wave of the COVID-19 pandemic and find that it can be largely explained by drawing on political economy. It does, hence, not constitute an exception. We show that many governments have (mis-)used the pandemic as a pretext to curtail media freedom. We further show that executive decrees are considered as a substitute for states of emergency by many governments. [ABSTRACT FROM AUTHOR]

How harshly should society punish young lawbreakers? Through a fuzzy regression discontinuity design, I compare harsh and rehabilitative criminal incarceration practices. Young offenders sent to the more rehabilitative youth facilities become less likely to reoffend. On the contrary, offenders at the margin of the age cutoff and exposed to the harsher youth facilities are 27 percent more likely to recidivate in the eight years subsequent to their custody, and they are more likely to commit violent offenses, thefts, and criminal damages. Keeping young offenders separate from their older peers in prison seems effective, but only in institutions not solely focused on punishment. [ABSTRACT FROM AUTHOR]

In this conceptual paper, we discuss the evolutionary root causes of institutional complexity, defined as inherently incompatible prescriptions when different sources of institutions intersect at the same space and time. We suggest that societies are not delineated by clear-cut boundaries, but dynamically evolve along multiple co-existing levels of social lineages, each of which is associated with a given replicator. Institutional complexity thus can be conceived as a mix of potentially conflicting dispositions due to replicators derived from different historically separate social lineages. Decomposing institutional complexity into its evolutionary roots, we identify two types of inherent incompatibility that define institutional complexity: the incompatibilities between co-existing levels of the same social lineage as they evolve, and the incompatibilities between social lineages at the same level as they synthesize after having been separate in history but intersect again at the same space and time. Implications are discussed for future institutional studies. [ABSTRACT FROM AUTHOR]

Despite being on average a relatively happy country, Colombia has a high level of inequality in subjective well-being (SWB). Using Gallup World Poll data for the period from 2010 to 2018, this paper tests the direction and strength of association of a range of objective and subjective factors with SWB and explains differences in SWB across individuals and space. The perceived welfare of the average Colombian is mainly influenced by conditions and expectations related to economic opportunities and education. However, quantile regressions, reveal substantial differences in the domains that matter to those at the bottom and top of the experienced welfare distribution. Standard-of-living improvements, housing affordability, and civic engagement matter more to the most fortunate top 20%, while having education, a job, sufficient income, economic security, and digital connectivity are much more strongly associated with the well-being of the bottom 20%. The life domains that matter more to the unhappiest respondents also explain the majority of the spatial differences in perceived welfare between residents in urban and rural areas as well as core and peripheral regions. Policy actions aimed at closing the gaps in these areas have the potential to increase well-being and reduce inequality in Colombia. [ABSTRACT FROM AUTHOR]

Critiques of the meritocracy have centered on its narrow definition and biased assessment of merit, its stigmatization of the unsuccessful, and excessive competition. This paper identifies a different mechanism that could have pernicious social and political consequences. Economic mobility sorts people based on certain 'productive' traits, separating them into classes, and thus alters social externalities. This sorting–separation–externalities mechanism can produce between-class polarization in social outcomes (e.g. alcoholism and drug abuse) and worsen aggregate outcomes over all classes, consistent with rising 'deaths of despair' in the United States (Case and Deaton, 2020, Deaths of Despair and the Future of Capitalism. Princeton University Press). When traits are endogenous, transition out of a caste-based society produces an initial burst of economic mobility which dissipates over time. Thus, a dynamic meritocratic society devolves into a static class-based society. I set out an alternative model called the 'experimental society', which is less susceptible to these problems. [ABSTRACT FROM AUTHOR]

This paper explores the existence of son preference and gender-based fertility behavior among Southeast Asian mothers. Using census data of ten countries (Cambodia, China, India, Indonesia, Malaysia, Myanmar, Nepal, Philippines, Thailand, and Vietnam) over the years 1970-2014 and a sample of over 18 million observation, I show that having a first-born girl is associated with 0.16 more children in the household, equivalent to 7.2 percent rise from the mean. The marginal effects are quite robust across various specifications and subsamples. The effects are larger for countries with lower human development index and individuals with lower education. A birth cohort analysis show that the effects are significantly smaller for later cohorts implying that son preference fertility behavior has diminished over time.

This paper analyses the influence of job discretion on employees’ subjective well-being (SWB) from a gender-based approach. Specifically, it explores whether the level of discretion given to employees in performing their jobs influences their SWB and whether this impact differs between women and men. Data from 20 European countries from Round 8 of the European Social Survey (ESS) are used to undertake an ordered probit analysis. Job discretion is approached through autonomy at work, supervision of other employees and influence on organisational policy decisions. Additionally, the individual's educational level is controlled to further explore gendered differences of job characteristics on SWB. The results show that job discretion does indeed affect SWB, and this effect is different for women and men. Moreover, the effect of job discretion on SWB is not homogeneous across different education levels.

In most cross-national research on Life Satisfaction (LS) an implicit assumption appears to be that the correlates of LS are the same the world over; 'one size fits all'. Using data from the World Values Survey (1999–2014), we question this assumption by assessing the effects of differing personal values/life priorities on LS in five world regions: the West, Latin America, the Asian-Confucian region, ex-Communist Eastern Europe, and the Communist countries of China and Vietnam. We indicate that differing values - traditional family values, friendship and leisure values, materialistic values, political values, prosocial and environmental values, and religious values – are endorsed to varying degrees in different parts of the world, and vary in whether they have positive or negative effects on LS. Personal values provide the basis for alternative 'recipes' affecting LS. By 'recipes' we mean linked set of values, attitudes, behavioural choices and domain satisfactions that have a positive or negative effect on LS. We estimate structural equation models which indicate that differing values-based recipes help to account for large, unexpected differences between mean levels of LS in the five world regions, compared with the levels 'predicted' by GDP per capita. In particular, the high priority given to traditional family and religious recipes in Latin America helps to account for unexpectedly high LS in that region. Deficits in prosocial attitudes and behaviours partly account for low LS in ex-Communist Eastern Europe. [ABSTRACT FROM AUTHOR]