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TECTACOM Sintesi della relazione

Project ID: 324004
Finanziato nell'ambito di: FP7-IDEAS-ERC
Paese: France

Mid-Term Report Summary - TECTACOM (The Economics of Cultural Transmission and Applications to Communities,Organizations and Markets)

The general purpose of the project is to develop an economic approach of preferences evolution and cultural transmission interacting with the functioning of communities, organizations and markets. The key building block of the analysis is an economic framework of cultural transmission and socialization that has been developed by the PI in the last decade (Bisin-Verdier 2000, 2001).
We first extend theoretically the economic framework of cultural transmission along various dimensions.
Specifically we consider the exploration of multi-level systems of cultural transmission. In this respect we analyze the question of the joint evolution of institutions and culture in various socio-economic environments, modeling institutional change as the evolving outcome of a centralized mechanism design problem, and cultural change as the result from a process of decentralized intergenerational transmission. By means of specific examples, we characterize conditions under which new institutions set forth reinforcing or mitigating cultural and institutional dynamics. We also develop a hierarchical theory of cultural transmission in which cultural transmission of a specific trait occurs at two levels: a decentralized local level with paternalistic family transmission and a centralized level with forward looking cultural institutions (or leaders) that purposefully affect and internalize the process of cultural evolution and its impact on the population dynamics. We consider the implications of competition for cultural leadership when more than one centralized institution tends to affect the process of cultural evolution.
We also consider the issue of the formation of preferences for legitimacy in the context of the political economy of emergent or transient centralized authority structures ( democratic or not), providing theoretical foundations for the notions of "political culture", "state legitimacy" and "institutional path dependence" in the process of state capacity building .

Finally we explore and extend analytical frameworks of cultural diffusion in spatial and social network contexts. Specifically we develop formal models of cultural diffusion on various social network structures. We analyze the importance of a "social structure bias" in cultural transmission that determines the direction of cultural change relating the economic structure of parental socialization incentives to the social network topology. In these set-ups, we consider specific issues such as the incentives for minority groups to culturally assimilate or separate, or the empirical importance of leadership peer effects and social spillovers in the transmission of specific cultural traits associated to education or delinquent behaviors.

We then develop and apply the approach theoretically and empirically in two specific areas:

The first one concerns the cultural dynamics of socially dysfunctional behaviors in local communities. Specifically we develop a formal framework providing some foundations for the notion of social disorganization theory as first proposed some sociologists to explain why high delinquency rates persisted in certain urban neighborhoods for long periods of time despite changes in the racial and ethnic composition of these communities. We develop a model of cultural transmission of behavioral norms (social and anti-social) in which two types of socialization agents may be in competition: the community/family versus local criminal organizations (gangs) that may emerge because of structural incentives to do so (weak legal and economic relative opportunities, social contexts). We embed such a model into an urban structure to characterize the determinants of spatial patterns of socially dysfunctional behaviors in urban contexts and to relate these to specific policy parameters.

The second one concerns the design and diffusion of corporate cultures in organizations and markets. In this respect, motivated by the standard problem of the diffusion/persistence of corporate culture after a merger across corporate entities, we design an economic experiment to analyze the persistence of coordination when individuals are already coordinated in teams on a specific profile of actions and then are gradually mixed with other players coordinated on a different set of actions. We study how the pattern of coordination evolves across groups depending on the different proportions of individuals “framed” in the first step into different coordination equilibria.
We also investigate theoretically the diffusion and competition of multiple subcultures (functional versus collusive) inside an organization facing some standard agency issues and how they relate to the distribution of rents associated to the structure of internal incentives. Finally we consider the issue of corporate culture in the context of the functioning of internal capital markets inside multinational firms and analyze the role of corporate values (and their diffusion) in the way globalized firms take their finance, entry, production and export decisions to destination markets.

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