The stability of exchange networks

Economic and sociological exchange theories predict divisions of exchange benefits given an assumed fixed network of exchange relations. Since network structure has been found to have a large impact on actors’ payoffs, actors have strong incentives for network change. We answer the question what happens to both the network structure and actor payoffs when myopic actors change their links in order to maximize their payoffs. We investigate the networks that are stable, the networks that are efficient or egalitarian with varying tie costs, and the occurrence of social dilemmas. Only few networks are stable over a wide range of tie costs, and all of them can be divided into two types: efficient networks consisting of only dyads and at most one isolate, and Pareto efficient and egalitarian cycles with an odd number of actors. Social dilemmas are observed in even-sized networks at low tie costs.     

Why does everybody hate me? Balance,status, and homophily: The triumvirate of signed tie formation

Despite being one of the foundational theories of signed (positive/negative) tie formation, the evidence for balance theory is far from conclusive. A recent promising alternative is status theory, but a theoretical and explanatory gap still remains, with a dearth of theories and evidence. We put forward and test eight separate theories of signed tie formation on two face-to-face networks of friendship and esteem of 282 students. We use dimension reduction (factor analysis) on the results tables comparing the predictions of these eight theories for 50 ERGM parameters with our estimated models. We find three main paradigms explain the majority of signed network formation: balance, status, and homophily.     

Exchange,role modeling and the intergenerational transmission of elder support attitudes: Evidence from three generations of Mexican-Americans

Social exchange theory and role modeling are alternative theories of how the willingness to provide intergenerational assistance is transmitted from one generation to the next. Distinguishing between these theories is difficult because they apparently lead to identical predictions. In this paper we propose a test that can distinguish between the two theories. We find a data set containing the variables necessary to implement the test and use it to estimate models of young adults’ elder support attitudes. The results provide at best weak evidence of exchange, but are consistent with a role model explanation of the transmission of intergenerational assistance attitudes, particularly for young men.     

A Nash bargaining model for simple exchange networks

Starting from exogenously given negotiation networks, sociological exchange theories explain bilateral divisions of fixed surpluses (e.g., cake, dollar) as consequences of the partners’ structural embeddedness. In accordance with the available experimental evidence, we focus on simple exchange networks and present a formal model for predicting profit splits from such structures. In contrast to other approaches, we combine the generalized Nash bargaining solution from game theory with the assumption that both relational features and network positions affect exchange outcomes. The resulting point predictions for profit splits correspond closely with experimental results obtained by Cook et al. [Cook, K.S., Emerson, R.M., Gillmore, M.R., Yamagishi, T., 1983. The distribution of power in exchange networks: theory and experimental results. American Journal of Sociology 89, 275–305], Lovaglia et al. [Lovaglia, M.J., Skvoretz, J., Willer, D., Markovsky, B., 1995. Negotiated exchanges in social networks. Social Forces 74, 123–155], Markovsky et al. [Markovsky, B., Willer, D., Patton, T., 1988. Power relations in exchange networks. American Sociological Review 53, 220–236], Simpson and Willer [Simpson, B., Willer, D., 1999. A new method for finding power structures. In: Willer, D. (Ed.), Network Exchange Theory. Praeger, Westport, CT, pp. 270–284], Skvoretz and Fararo [Skvoretz, J., Fararo, T.J., 1992. Power and network exchange: an essay toward theoretical unification. Social Networks 14, 325–344], Skvoretz and Willer [Skvoretz, J., Willer, D., 1993. Exclusion and power: a test of four theories of power in exchange networks. American Sociological Review 58, 801–818] as well as Yamagishi et al. [Yamagishi, T., Gillmore, M.R., Cook, K.S., 1988. Network connections and the distribution of power in exchange networks. American Journal of Sociology 93, 833–851].     

Non-response in social networks: The impact of different non-response treatments on the stability of blockmodels

Discerning the essential structure of social networks is a major task. Yet, social network data usually contain different types of errors, including missing data that can wreak havoc during data analyses. Blockmodeling is one technique for delineating network structure. While we know little about its vulnerability to missing data problems, it is reasonable to expect that it is vulnerable given its positional nature. We focus on actor non-response and treatments for this. We examine their impacts on blockmodeling results using simulated and real networks. A set of ‘known’ networks are used, errors due to actor non-response are introduced and are then treated in different ways. Blockmodels are fitted to these treated networks and compared to those for the known networks. The outcome indicators are the correspondence of both position memberships and identified blockmodel structures. Both the amount and type of non-response, and considered treatments, have an impact on delineated blockmodel structures.     

THEORIES OF COMMITMENT, ALTRUISM AND RECIPROCITY: EVIDENCE FROM LINEAR PUBLIC GOODS GAMES

Theories of commitment, altruism, and reciprocity have been invoked to explain and describe behavior in public goods and social dilemma situations. Commitment has been used to explain behaviors like water conservation and voting. Altruism has been applied to explain contributions to charities and intergenerational transfers and bequests. Reciprocity has been invoked to explain gift exchange and labor market decisions. This paper describes a set of experiments, which distinguish between these competing theories by testing their comparative statics predictions in a linear public goods setting. Results provide strong support for reciprocity theories over either theories of commitment or of altruism. ( JEL C9, D64, H41, C72)     

Dynamic exchange networks

Considering the theoretical and empirical untenability of static exchange networks, researchers have asked how exchange outcomes change when links are added or deleted. The present paper assesses the validity of seemingly sensible propositions concerning the effects of adding and deleting a link on (i) the payoffs of the actors in the link, (ii) the payoffs of actors in neighboring links and (iii) the variance of payoffs in the exchange network. The propositions were examined by applying expected value theory (EVT) to all 13,597 networks up to size 8. All propositions were falsified. Some falsifications of propositions could be attributed to EVTs prediction that actors use sub-optimal exchange relations. Since other well-known theories of exchange, like power-dependence theory and network exchange theory, also predict that actors use sub-optimal relations, these results are robust to selection of the theory of exchange.     

Resource characteristics in social exchange networks: Implications for positional advantage

Despite the wide range of resources that traverse social networks, social exchange research has focused on only a narrow subset. Notably, prior social exchange research has not considered resources like information that have the capacity to diffuse through networks. The current study investigates how differences between the standard social exchange resource and an information-type resource affect the advantage provided by one's network position. Results of a laboratory experiment support predictions and offer two new insights to the foundations of positional advantage: (1) the location of advantageous positions in a network differs by resource characteristics, and (2) only in particular situations is a single position able to experience high levels of both power and exchange frequency.     

Triadic closure in two-mode networks: Redefining the global and local clustering coefficients

As the vast majority of network measures are defined for one-mode networks, two-mode networks often have to be projected onto one-mode networks to be analyzed. A number of issues arise in this transformation process, especially when analyzing ties among nodes’ contacts. For example, the values attained by the global and local clustering coefficients on projected random two-mode networks deviate from the expected values in corresponding classical one-mode networks. Moreover, both the local clustering coefficient and constraint (structural holes) are inversely associated to nodes’ two-mode degree. To overcome these issues, this paper proposes redefinitions of the clustering coefficients for two-mode networks.     

Votes,Favors, Toys,and Ideas: The Effect of Resource Characteristics on Power in Exchange Networks

Abstract

The goal of this research is to understand how resource characteristics influence the development of power in exchange networks. Transferability and duplicability are identified as fundamental resource characteristics that have not been examined systematically in prior social exchange research. Varying resource transferability and duplicability alters the mechanisms that produce power and determine which positions in a network have a power advantage. To predict where power will develop, I rely on existing measures for previously studied resources and introduce relevant principles of network structure for resources that have not been studied before. This theoretical logic is supported by a series of simulated exchange networks that apply behavioral principles observed in prior experimental research to the exchange of a broader variety of resources than previously considered. Results indicate how the pattern of power use in a network is contingent upon the type of resource being exchanged.     

Risk,trust and knowledge networks in farmers’ learning

This study reports on New Zealand dairy farmers’ access to and use of information as mediated through conditions of risk and trust within the context of their interpersonal social networks. We located participants’ reports of their information use within their perceived environments of trust and risk, following Giddens's [1990. The consequences of modernity. Polity Press, Stanford, CA] typology of trust and risk in pre-modernity and modernity. The research participants were constant users of interpersonal and print information from numerous sources, and monitored their incoming data in the light of strategic needs, reflecting their roles as both farming practitioners and business owners. Socio-spatial knowledge networks (SSKNs) combine individuals’ explanatory cognitive models of information acquisition and use with a micro-geographical analysis of their interpersonal networks. The participants showed characteristics of pre-modern, modern and even post-modern society in respect of their use of complex interactional forms, as well as a blending of individualistic and communitarian practices and concerns in their professional and personal lives.     

Complexity,Chaos, and Nonlinear Dynamics: A New Perspective on Career Development Theory

The author presents a theory of career development drawing on nonlinear dynamics and chaos and complexity theories. Career is presented as a complex adaptive entity, a fractal of the human entity. Characteristics of complex adaptive entities, including (a) autopiesis, or self‐regeneration; (b) open exchange; (c) participation in networks; (d) fractals; (e) phase transitions between order and chaos, (f) search for fitness peaks; (g) nonlinear dynamics; (h) sensitive dependence, (i) attractors that limit growth; (j) the role of strange attractors in emergence; and (k) spirituality, are described and then applied to careers. The article concludes with a brief case analysis and implications for practice and research.     

Network public goods with asymmetric information about cooperation preferences and network degree

We propose a game theoretical model of one-shot network public goods formalizing the ‘closure argument’ that cooperation is more frequent in denser groups or networks. Equilibrium analyses show that (i) an ‘inefficiency problem’ exists: players all preferring mutual cooperation need not all cooperate; (ii) in dyads, groups and networks with degree independence, first order stochastic dominance shifts of the distribution of cooperation preferences or the degree distribution (weakly) increases cooperation, and (iii) the latter result does not hold for networks with degree dependence. Hence the closure argument always holds in networks satisfying degree independence but not in other networks.     

Introduction to stochastic actor-based models for network dynamics

Stochastic actor-based models are models for network dynamics that can represent a wide variety of influences on network change, and allow to estimate parameters expressing such influences, and test corresponding hypotheses. The nodes in the network represent social actors, and the collection of ties represents a social relation. The assumptions posit that the network evolves as a stochastic process ‘driven by the actors’, i.e., the model lends itself especially for representing theories about how actors change their outgoing ties. The probabilities of tie changes are in part endogenously determined, i.e., as a function of the current network structure itself, and in part exogenously, as a function of characteristics of the nodes (‘actor covariates’) and of characteristics of pairs of nodes (‘dyadic covariates’). In an extended form, stochastic actor-based models can be used to analyze longitudinal data on social networks jointly with changing attributes of the actors: dynamics of networks and behavior.     

Computational Modeling of Statistical Learning: Effects of Transitional Probability Versus Frequency and Links to Word Learning

Statistical learning mechanisms play an important role in theories of language acquisition and processing. Recurrent neural network models have provided important insights into how these mechanisms might operate. We examined whether such networks capture two key findings in human statistical learning. In Simulation 1, a simple recurrent network (SRN) performed much like human learners: it was sensitive to both transitional probability and frequency, with frequency dominating early in learning and probability emerging as the dominant cue later in learning. In Simulation 2, an SRN captured links between statistical segmentation and word learning in infants and adults, and suggested that these links arise because phonological representations are more distinctive for syllables with higher transitional probability. Beyond simply simulating general phenomena, these models provide new insights into underlying mechanisms and generate novel behavioral predictions.     

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.     

Relationship Transitions Among Older Cohabitors: The Role of Health,Wealth, and Family Ties

This study explored how health, wealth, and family ties shape older cohabitors' chances of marrying or separating. Drawing on rational choice and exchange theories, the author argues these factors affect women and men differently because the rewards, alternatives, and barriers of later‐life union formation differ by gender. The study used panel data from the 1998–2006 Health and Retirement Study and a sample of cohabitors 50 and older (N = 1,136). For older female cohabitors, large families and entitlement income lower the risk of marrying, whereas close social networks raise the risk of separating. Moreover, health and wealth have an interactive relationship in that the risk of marrying is highest for unhealthy male cohabitors when they are very wealthy but is highest for the poorest female cohabitors when they are in excellent health. Older men may be exchanging economic resources for caregiving, and cohabitation may be an adaptive response to the gendered costs and barriers of later‐life union formation.     

Power,Status, and Affect Control

Abstract

Power, status, and the evaluation, potency, and activity dimensions of affect control theory may be interrelated to a degree allowing for bridges between these theories. This paper makes two preliminary hypotheses: (1) Occupational power will significantly predict occupational status and (2) The potency of an occupation will significantly predict the power of the occupation. Two reliable scales developed from theories of power and status tap respondents' assessment of the power and status of various occupations. Two samples of undergraduates at a large Midwestern university rate the power and status of different but overlapping lists of occupations. Results are consistent across samples and support both hypotheses. Regression analyses produce coefficients establishing affect control theory's EPA (evaluation, potency, and activity) profiles for the fundamental concepts of power from network exchange theory and status from status characteristics theory. These profiles may be useful for theoretical development bridging fundamental theories of group processes.     

Monetary Fundamentals and Exchange Rate Dynamics under Different Nominal Regimes

We investigate the dynamic relationship between the U.S. dollar exchange rate and its fundamentals across different exchange rate regimes using data from the late 1800s or early 1900s for six countries. For these countries there is evidence of a long-run relation between the exchange rate and monetary fundamentals consistent with conventional exchange rate theories. Employing a multivariate regime-switching framework, we find that the relative importance of exchange rates and fundamentals in restoring the long-run equilibrium implied by the exchange rate–monetary fundamentals model varies significantly over time and is affected by the exchange rate regime in operation. (JEL F31 )