Trust and social capital in the regulation of lending activities

When a bank grants a loan, it takes the risk that the borrower will not honor his debt. To reduce this uncertainty, banks have created instrumental evaluation methods in order to try to evaluate the risk more objectively. An analysis of financial counselors’ practices shows the limits of these methods. To obtain information needed for the financial risk evaluation and to reduce the information asymmetry between bankers and borrowers, financial counselors integrate social networks to establish bonds of trust and to accumulate social capital. The quality of the social bond determines the quality of the gathered information and therefore the quality of the risk evaluation. Bank management is aware of the limits of instrumental methods and the importance of social risk evaluation. To improve their economic efficiency, they modify their work organization and their management practices so as to facilitate the emergence of a bond of trust and the accumulation of social capital by their financial counselors. The analysis of economic actors’ speech and behavior involved in activities of credit shows that behind the claimed altruism nature of the trust relationship exists an economic rationality whose social and temporal horizons of optimization differ from the model of the trade exchange seen in conventional economic theory.     

Analysing networks of networks

We consider data with multiple observations or reports on a network in the case when these networks themselves are connected through some form of network ties. We could take the example of a cognitive social structure where there is another type of tie connecting the actors that provide the reports; or the study of interpersonal spillover effects from one cultural domain to another facilitated by the social ties. Another example is when the individual semantic structures are represented as semantic networks of a group of actors and connected through these actors’ social ties to constitute knowledge of a social group. How to jointly represent the two types of networks is not trivial as the layers and not the nodes of the layers of the reported networks are coupled through a network on the reports. We propose to transform the different multiple networks using line graphs, where actors are affiliated with ties represented as nodes, and represent the totality of the different types of ties as a multilevel network. This affords studying the associations between the social network and the reports as well as the alignment of the reports to a criterion graph. We illustrate how the procedure can be applied to studying the social construction of knowledge in local flood management groups. Here we use multilevel exponential random graph models but the representation also lends itself to stochastic actor-oriented models, multilevel blockmodels, and any model capable of handling multilevel networks.     

The emergence of employer information networks in an experimental labor market

We use laboratory experiments to investigate whether employer networks emerge that facilitate information sharing about the trustworthiness of job candidates. The design allows us to distinguish between mechanisms underlying the relations among employers and those between employers and workers. One type of network we observe is an ‘anonymity network’ where information is anonymously and voluntarily provided as a collective good for all employers to use. The other type is a ‘reciprocity network’ where information sharing is driven by the rewarding of previously given information by the requestor. Recruitment through these networks leads to higher earnings for both employers and workers.     

Trust Networks in Transnational Migration

The sheer volume of migrant remittances to relatively poor countries, including those of Latin America and the Caribbean, nicely dramatizes the genuinely transnational social ties created by long-distance migration. The evidence underlines that migration flows are serious business, not only for the individuals and families involved, but also for whole national economies. Thinking about remittances also allows us to identify some crucial social processes of which most migrants and first-hand students of migration are well aware, but for which we have neither well-established theories, carefully crafted concepts, nor extensive evidence. I mean the creation, use, and transformation of interpersonal trust networks within migration streams.     

Diffusion of innovations through social networks: Determinants and implications

Social scientists have long been interested in the diffusion of innovations—the process by which new ideas, behavior, and practices spread between persons, organizations, and even countries. While innovations can enter a community through various channels, ongoing spread of innovations through a community occurs through the medium of social networks—collections of interpersonal or digital relationships connecting actors to each other. Social networks are important for diffusion because relationships foster communication, trust, and flow of information. Diffusion outcomes are also shaped by the structural properties of social networks such as density, centrality, and strength of ties, as well as properties of the innovation and the actors involved in the process. The purpose of the article is twofold: (1) to take stock of the field and review ongoing debates on the role of social networks in the diffusion of innovations and (2) to summarize the sociological implications of the diffusion of innovations through social networks.     

Incentivising trust

We argue that trust can be incentivised by measures which increase the ability of trusters to protect themselves against risk. We work within the framework originally established by Berg, Dickhaut, and McCabe (1995) in which trust is measured experimentally as the ability to generate reciprocity in response to an initial offer of money within a two-person game. An incentive is conveyed both by means of variations in the multiplier applied to the first player’s initial offer and by giving the first player the opportunity to insure themselves against the possibility that the second player will fail to reciprocate their initial offer. Measured trust is strongly responsive to both these incentives. Thus third parties have the ability to influence the outcome of the game, not only, as in the analysis of Charness, Cobo-Reyes, and Jimenez (2008), by punishing failure to reciprocate and rewarding ‘good’ initial offers, but also by offering protection which strengthens the first player’s risk efficacy, or ratio of assets to risk.     

Confidentiality,power relations and evaluation of potential harm in the study of the personal and organizational networks of travel agents in Moscow

Network research in organizational contexts faces ethical challenges related to revealing the identity of participants, managing power relations, and managing the interests and potential harms of the different stakeholders. In this article, we review the ethical issues associated with the investigation of the personal and organizational networks of travel agents in Moscow. In our case study, we interviewed 32 tourism agents from Moscow and its region, obtaining information on 45 people with whom they have regular relation as part of their work; and relational data, with a 2-mode matrix, on 15 organizations with which the agency could be linked in the Russian-Andalusian tourism market. Our results highlight the utility of presenting the information of personal networks in an aggregate manner. It also demonstrates the value of cultural adaptation strategies and adjustment to the characteristics of the community. Moreover, the central role of power relations in organizations, within a cultural context with a greater distance to authority was also found.     

Divining Value with Relational Proxies: How Moneylenders Balance Risk and Trust in the Quest for Good Borrowers1

This analysis of the U.S. credit industry explores how lenders evaluate people during the loan application process. They use a variety of risk‐assessment techniques in conjunction with trust‐building mechanisms that I call relational proxies. The relational proxies that lenders rely on are behavioral impressions, reputation information, and financial narratives that explain information on credit reports. Lenders use this subjectively evaluated trust assessment interdependently with standardized financial information to enhance their decision‐making process. Face‐to‐face evaluation of potential borrowers is mediated by institutional rules meant to reduce the need for trust. However, for the lenders in this study, a good borrower is always a trustworthy borrower.     

Change in Covert Social Movement Networks: The ‘Inner Circle’ of the Provisional Irish Republican Army

In this paper, we contribute to both the growing body of literature on social movement networks and the growing body of literature on change in networks by exploring patterns and mechanisms of change within the network of the ‘inner circle’ of the Provisional Irish Republican Army. Specifically, we focus upon the period between 1969 (when it formed) and 1988 (the last point for which we have been able to gather good data). Our primary aims are substantive. We want to know how this network changed over time. In addition, however, our analysis identifies changes which other analysts might look for in their networks and offers methodological suggestions for those who, like us, find that their networks do not meet the assumptions of mainstream approaches to modelling network dynamics. There is a further dimension to the paper, however. We are studying a covert social movement network. This is a special type of movement network whose organisation and dynamics are predicted to vary from other movement networks. Some have suggested that they are inclined to be relatively static because the need for trust within them is so great and the risk to whatever they hold secret so considerable when new ties are formed that their members tend only to recruit within the pool of their pre-existing ties and actively seek to minimise recruitment and the formation of new ties. One of the aims of our paper was to determine whether and to what extent this is so.     

Affinity Paths and information diffusion in social networks

Widespread interest in the diffusion of information through social networks has produced a large number of Social Dynamics models. A majority of them use theoretical hypothesis to explain their diffusion mechanisms while the few empirically based ones average out their measures over many messages of different contents. Our empirical research tracking the step-by-step email propagation of an invariable viral marketing message delves into the content impact and has discovered new and striking features. The topology and dynamics of the propagation cascades display patterns not inherited from the email networks carrying the message. Their disconnected, low transitivity, tree-like cascades present positive correlation between their nodes probability to forward the message and the average number of neighbors they target and show increased participants’ involvement as the propagation paths length grows. Such patterns not described before, nor replicated by any of the existing models of information diffusion, can be explained if participants make their pass-along decisions based uniquely on local knowledge of their network neighbors affinity with the message content. We prove the plausibility of such mechanism through a stylized, agent-based model that replicates the Affinity Paths observed in real information diffusion cascades.     

Snowball sampling: using social networks to research non‐heterosexual women

This paper explores snowball sampling, a recruitment method that employs research into participants' social networks to access specific populations. Beginning with the premise that research is ‘formed’, the paper offers one account of snowball sampling and using social networks to ‘make’ research. Snowball sampling is often used because the population under investigation is ‘hidden’ either due to low numbers of potential participants or the sensitivity of the topic, for example, research with women who do not fit within the hegemonic heterosexual norm. This paper considers how the recruitment technique of snowball sampling, which uses interpersonal relations and connections between people, both includes and excludes individuals. Following this, the paper contends that due to the use of social networks and interpersonal relations, snowball sampling (in)forms how individuals act and interact in focus groups, couple interviews and interviews. Consequently, snowball sampling not only results in the recruitment of particular samples, use of this technique produces participants' accounts of their lives. Doctoral research with (rather than on or for) 28 non‐heterosexual women is used to examine the inclusions and exclusions of snowball sampling and how interpersonal relations form research accounts.     

Social and spatial networks: Kinship distance and dwelling unit proximity in rural Thailand

We address a long hypothesized relationship between the proximity of individuals’ dwelling units and their kinship association. Better understanding this relationship is important because of its implications for contact and association among members of a society. In this paper, we use a unique dataset from Nang Rong, Thailand which contains dwelling unit locations (GPS) and saturated kinship networks of all individuals living in 51 agricultural villages. After presenting arguments for a relationship between individuals’ dwelling unit locations and their kinship relations as well as the particulars of our case study, we introduce the data and describe our analytic approach. We analyze how kinship – considered as both a system linking collections of individuals in an extended kinship network and as dyadic links between pairs of individuals – patterns the proximity of dwelling units in rural villages. The results show that in general, extended kin live closer to one another than do unrelated individuals. Further, the degree of relatedness between kin correlates with the distance between their dwelling units. Close kin are more likely to co-reside, a fact which drives much of the relationship between kinship relatedness and dwelling unit proximity within villages. There is nevertheless suggestive evidence of a relationship between kinship association and dwelling unit proximity among kin who do not live together.     

Good health and the bridging of structural holes

Bridges that span structural holes are often explained in terms of the entrepreneurial personalities or rational motivations of brokers, or structural processes that lead to the intersection of social foci. I argue that the existence and use of bridges in interpersonal networks also depends on individuals’ health. Poor health may make it more difficult to withstand the pressures and to execute some of the common tasks associated with bridging (e.g., brokerage). I examine this possibility using egocentric network data on over 2500 older adults drawn from the recent National Social Life, Health, and Aging Project (NSHAP). Multivariate regression analyses show that both cognitive and functional health are significantly positively associated with bridging, net of sociodemographic and life-course controls. The relationship between functional (kinesthetic) health and bridging appears to be partially mediated by network composition, as older adults who have poorer functional health also tend to have networks that are richer in strong ties. Several potential mediation mechanisms are discussed. Cognitive function remains significantly associated with bridging net of network composition, suggesting that the inherent challenges of maintaining bridging positions may be more difficult to cope with for those who have cognitive impairments than for those who have functional impairments such as limited mobility. An alternative explanation is that cognitively impaired individuals have more difficulty recognizing (and thus strategically using) bridges in their networks. Theoretical implications and possibilities for future research are discussed.     

Trust and rule

Over most of history, participants in trust networks such as clandestine religious sects and kinship groups have shielded them from rulers' intervention, rightly fearing dispossession or exploitation. Yet no substantial regime can survive without drawing on resources held by trust networks. In particular, democratic regimes cannot operate without substantial integration of trust networks into public politics. Rulers' application of various combinations among coercion, capital, and commitment in the course of bargaining with subordinate populations produces a variety of regimes. Contemporary democracies face a threat of de-democratization if major segments of the population withdraw their trust networks from public politics.     

Theories of network exchange: Anomalies,desirable properties,and critical networks

The present study evaluates four well-known theories of exchange in networks. In previous research these theories’ predictions were compared for a small set of networks using experimental data. We compared their predictions for all 12,112 networks up to size 8. By comparing these predictions we (i) identified anomalies in theories of network exchange, (ii) investigated to what extent the theories satisfy basic principles of exchange, (iii) identified ‘critical’ networks for which predictions are very different. We conclude that exchange in networks is not yet well understood.     

More structural holes,more risk? Network structure and risk perception among marijuana growers

This study examines the relationship between network structure and risk perceptions. We use self-report data on 359 illicit marijuana growers and their personal co-worker networks. Our results show that growers with more structural holes in their co-worker network perceive higher risk of apprehension from law enforcement. We argue that this result is facilitated by two mechanisms: 1) the amount and quality of information available to growers about risks and detection, which uses guidance from Stafford and Warr’s (1993) concept of vicarious deterrence; and, 2) the trust inherent in their network and the growers’ self-awareness of their own network position, which relies on Coleman’s (1988) and Burt’s (2005) ideas of network closure as a protective factor.     

Analysis of contested reports in exchange networks based on actors’ credibility

Exchanges of information, goods, and services are an essential part of human relations. However, a significant number of reported exchange ties tend to be contested: the reports of the sender and the receiver in an exchange do not concur with each other. To accurately understand the exchange ties between actors and the properties of the associated exchange networks, it is important to address such disagreement. Common practices either eliminate the contested reports or symmetrize them. Neither of them is ideal, as both underuse valuable information in the reports. In this paper, we propose new methods for handling contested exchange ties. The key idea is to measure actors’ credibility based on their asymmetric connections. For example, an actor is less credible the more contested ties she or he has. Using the credibility scores thus calculated, we develop two methods for handling contested ties. The first method is deterministic: it takes the report of the more credible actor as a reflection of the true exchange status between two actors. The second method is stochastic: it assumes the true exchange status between two actors is a random draw from their reports with probabilities proportional to their credibility. We illustrate the above methods by analyzing contested reports in cigarette exchange networks among middle school students in China and social and economic exchange networks among rural households in South Africa. The results show that our methods provide more reasonable corrections to contested reports than previous methods.     

The influence of customer use of corporate websites: Corporate social responsibility,trust, and word-of-mouth communication

This study investigates the potential of organization websites from the customer's perspective. The findings include significant direct effects of customers’ use of corporate websites on their perceptions of a company's corporate social responsibility and their trust in the company, and indirect effects of their use of corporate websites on positive word-of-mouth through trust. The results also indicate a close link between perception of corporate social responsibility and trust.     

Sources of socialization for interpersonal trust: an exploration of low-income Black adolescents’ experiences

Much of the literature on interpersonal trust is quantitative in nature, using scales developed primarily with White middle-class and upper-class adults. To understand how another racial group of a different socioeconomic background and age views interpersonal trust, we considered the experiences of 22 low-income Black adolescents. The adolescents participated in a relationship education program and were interviewed about their interpersonal trust experiences. Results of a qualitative data analysis revealed that most adolescents defined interpersonal trust based on honesty and fidelity, with a particular emphasis on monogamy in romantic relationships. Adolescents identified direct messages from family members and personal relationship experiences as sources of socialization for interpersonal trust. Although some adolescents reported that the relationship education program enhanced their understanding of and willingness to trust, others maintained that trust can only be learned through personal experiences. Though the adolescents generally trusted family members, they experienced challenges trusting friends and romantic partners. Despite this, adolescents considered interpersonal trust a vital and a necessary part of romantic relationships. We discuss implications of the findings for relationship stability and satisfaction.