Ronald S. Burt, Ray E. Reagans, and Hagay C. Volvovsky (2020). Network Brokerage and the Perception of Leadership. Social Networks, 65, 33-50. https://doi.org/10.1016/j.socnet.2020.09.002
We renovate a classic experiment to define a research platform that provides data on network behavior and the causal effect of access to structural holes. Our hypothesis is that people are perceived to be leaders when they behave as network brokers, which is to say, when they coordinate information across structural holes. We focus on the perception of leadership to connect with the many field studies in which access to structural holes predicts success measures keyed to leadership. Our hypothesis is clearly supported. The broker-leader association we report is very similar in strength and form to broker-success associations reported in previous research. At the same time, it is also clear that people adapt to their randomly assigned network, re-shaping it to suit preferences that in some part emerge in team deliberations or outside the experiment. A modification to our hypothesis — at least for these small laboratory teams — is that monopoly brokerage is key to being cited as team leader. Leadership is ambiguous when multiple people are positioned to be brokers unless one person emerges by his or her network behavior as a monopoly broker. Our summary conclusion is that access to structural holes can be causal to the perception of leadership, a characteristic implicit in many success measures used to document the broker-success association.
Lisa Bernstein and Hagay Volvovsky (2015). Not What You Wanted to Know: The Real Deal and the Paper Deal in Consumer Contracts – Comment on the work of Florencia Marotta-Wurgler. Jerusalem Review of Legal Studies, 12(1), 128-136. https://doi.org/10.1093/jrls/jlv002
We explore the difference between the rights and obligations specified in the legally binding contracts formalizing consumer transactions and how sellers behave in practice. We argue that institutional factors such as the cost and availability of litigation and the spread of reputational information about past performance shape sellers' actions in conjunction with the formal contract. Moreover, the effects of formal contracts, reputation and the availability of litigation on the rights consumers enjoy are interdependent with each other. As a result, researchers and policy makers seeking to protect consumers cannot confine their analysis to the language of legally binding contracts.
What I'm Working on Right Now
Hagay C. Volvovsky, Collaboration at the Tower of Babel: The Meaning of Cooperation and the Foundations of Long-Term Exchange (under review, AJS)
This paper is the first to propose and validate a general process by which exchange partners arrive at a shared understanding of what actions constitute cooperation and defection in changing and complex environments, thereby making cooperation possible. Achieving cooperation in the face of incentives to defect is essential in organizations and markets. Past research has focused on the risk of defection as a determinant of cooperative outcomes but has failed to explain how exchange partners arrive at shared understandings of what actions constitute cooperation and defection, and why exchanges featuring the same risk of defection sometimes have different cooperative outcomes. I resolve this puzzle and explain how and when exchange partners can coordinate on the meaning of cooperation. I do so by advancing and testing a theory of shared coordination frameworks – developed through long-term exchange – that help exchange partners reach common interpretations of cooperation when unanticipated events inevitably occur. I then provide theoretical clarification for the prevalence of long-term exchange, by demonstrating the causal primacy of shared frameworks in actors’ decisions to exchange with long-term partners. I validate these propositions using a novel experimental platform that is the first to (1) manipulate participants’ coordination frameworks; and (2) disentangle their effect from the risk of defection and other correlates of long-term exchange. The results indicate that shared coordination frameworks dramatically increase the likelihood of successful cooperation and long-term relationships in complex exchanges.
Hagay C. Volvovsky, Revising Economic Action and Social Structure: The Role of Embeddedness in the Age of Amazon
Network scholars posit that networks provide better reputational enforcement than market reputation (i.e., the reputation that would emerge from a sample of market participants). In this view, reputational signals are local to social network neighborhoods. Because it is costly to communicate with strangers, and there is little reason to trust them, reputational signals are stronger in the presence of shared third parties and decay with network distance. Consequentially, reputational sanctions and norm enforcement are also local to the network. Yet, the rise of reputational aggregation platforms such as Amazon and eBay call these mechanisms into question. In this paper, I identify an additional mechanism driving network-based reputational enforcement, one that places a boundary condition on both network and market based reputational enforcement. I argue that the informativeness of a reputational signal from A to B about C increases in relation to B’s belief that A used the same coordination framework B would in making her evaluation of C. The closer A’s framework is to B’s, the more informative the signal. When the underlying exchange relies on a well-established coordination framework, reputational signals from socially distant actors become informative, making market reputation and the platforms that aggregate it far more effective in providing reputational enforcement than social networks and reducing actors’ reliance on social networks for partner selection. Conversely when well-established frameworks are unavailable, reputational signals from strangers about whose frameworks you have little information become uninformative, rendering platforms ineffective. When that is the case, there are good reasons to believe that frameworks - and thus reputations and reputational enforcement – are local to social network neighborhoods, and social networks continue to play a large role in facilitating cooperation and guiding partner selection.
Ray E. Reagans, Hagay C. Volvovsky and Ronald S. Burt, When Will they (ever) Learn? Identifying the Network Effect on Learning
If the objective is to improve a team’s capacity for learning, how should team members be connected to each other? Existing research provides a variety of answers to this question, with one group of scholars emphasizing the importance of closed networks; another more open networks; and a third group focusing on the importance of combining open and closed network features. Despite the intuitive appeal of each network solution, we believe each one should be met with skepticism. There is little direct evidence linking social networks to learning. Our research objective was to identify the causal network effect on learning. We analyzed learning rates across 45 teams that varied in terms of how team members were allowed to communicate with each other. The communication structures captured the network solutions described in existing research. All teams exhibited evidence for learning but teams in open networks learned faster than teams in closed networks. The best teams, however, combined elements of open and closed network structures. We discuss the implications of our results for research on networks and learning.
Hagay C. Volvovsky and Lisa Bernstein, People as a Contract Provision: How Organizations Manipulate Social Networks to Bond Strategic Alliances
We explore how organizations facilitate trust, cooperation and innovation in strategic alliances via the strategic exchange of personnel. Employees transferring from one partner organization to another become brokers bridging the structural hole between the two. Their unique position allows them to successfully communicate with and understand members of both organizations, thus facilitating knowledge transfer and reducing the possibility that cultural differences will lead to a breakdown in the relationship. Furthermore, transferring employees' personal relationships in organization they depart bond their actions as agents of the organization they join. Employees leaving organization A to join organization B are far less likely to act opportunistically towards their former colleagues in A. We support these propositions using a comprehensive dataset of strategic alliances in the biotechnology industry, from its inception in the 1980's to 2010.