The power of indirect social ties

While direct social ties have been intensely studied in the context of computer-mediated social networks, indirect ties (e.g., friends of friends) have seen little attention. Yet in real life, we often rely on friends of our friends for recommendations (of good doctors, good schools, or good babysitters), for introduction to a new job opportunity, and for many other occasional needs. In this work we attempt to 1) quantify the strength of indirect social ties, 2) validate it, and 3) empirically demonstrate its usefulness for distributed applications on two examples. We quantify social strength of indirect ties using a(ny) measure of the strength of the direct ties that connect two people and the intuition provided by the sociology literature. We validate the proposed metric experimentally by comparing correlations with other direct social tie evaluators. We show via data-driven experiments that the proposed metric for social strength can be used successfully for social applications. Specifically, we show that it alleviates known problems in friend-to-friend storage systems by addressing two previously documented shortcomings: reduced set of storage candidates and data availability correlations. We also show that it can be used for predicting the effects of a social diffusion with an accuracy of up to 93.5%.Comment: Technical Repor

Trust based attachment

In social systems subject to indirect reciprocity, a positive reputation is key for increasing one's likelihood of future positive interactions. The flow of gossip can amplify the impact of a person's actions on their reputation depending on how widely it spreads across the social network, which leads to a percolation problem. To quantify this notion, we calculate the expected number of individuals, the "audience", who find out about a particular interaction. For a potential donor, a larger audience constitutes higher reputational stakes, and thus a higher incentive, to perform "good" actions in line with current social norms. For a receiver, a larger audience therefore increases the trust that the partner will be cooperative. This idea can be used for an algorithm that generates social networks, which we call trust based attachment (TBA). TBA produces graphs that share crucial quantitative properties with real-world networks, such as high clustering, small-world behavior, and power law degree distributions. We also show that TBA can be approximated by simple friend-of-friend routines based on triadic closure, which are known to be highly effective at generating realistic social network structures. Therefore, our work provides a new justification for triadic closure in social contexts based on notions of trust, gossip, and social information spread. These factors are thus identified as potential significant influences on how humans form social ties

Collaboration Networks, Structural Holes, And Innovation: A Longitudinal Study

To assess the effects of a firm's network of relations on innovation, this paper elaborates a theoretical framework that relates three aspects of a firm's ego network-direct ties, indirect ties, and structural holes (disconnections between a firm's partners)-to the firm's subsequent innovation output. It posits that direct and indirect ties both have a positive impact on innovation but that the impact of indirect ties is moderated by the number of a firm's direct ties. Structural holes are proposed to have both positive and negative influences on subsequent innovation. Results from a longitudinal study of firms in the international chemicals industry indicate support for the predictions on direct and indirect ties, but in the interfirm collaboration network, increasing structural holes has a negative effect on innovation. Among the implications for interorganizational network theory is that the optimal structure of interfirm networks depends on the objectives of the network members.Managemen

An Affect Theory of Social Exchange

This article develops a theory that explains how and when emotions, produced by social exchange, generate stronger or weaker ties to relations, groups, or networks. It is argued that social exchange produces positive or negative global feelings, which are internally rewarding or punishing. The theory indicates that social units (relations, groups, networks) are perceived as a source of these feelings, contingent on the degree of jointness in the exchange task. The jointness of the task is greatest if (1) actors find it difficult to distinguish their individual effects on or contributions to solving the exchange task (nonseparability) and (2) actors perceive a shared responsibility for success or failure at the exchange task. The theory explicates the effects of different exchange structures on these conditions and, in turn, on cohesion and solidarity. Implications are developed for network-to-group transformations

Cooperative Or Controlling? The Effects Of Ceo-Board Relations And The Content Of Interlocks On The Formation Of Joint Ventures

This study examines the influence of the social network of board interlocks on strategic alliance formation. Our theoretical framework suggests how board interlock ties to other firms can increase or decrease the likelihood of alliance formation, depending on the content of relationships between CEOs (chief executive officers) and outside directors. Results suggest that CEO-board relationships characterized by independent board control reduce the likelihood of alliance formation by prompting distrust between corporate leaders, while CEO-board cooperation in strategic decision making appears to promote alliance formation by enhancing trust. The findings also show how the effects of direct interlock ties are amplified further by third-party network ties.Business Administratio

Executive Compensation in Controlled Companies

Conventional wisdom among corporate law theorists holds that the presence of a controlling shareholder should alleviate the problem of managerial opportunism because such a controller has both the power and incentives to curb excessive executive pay. This Article challenges that common understanding by proposing a different view based on an agency problem paradigm. Controlling shareholders, this Article suggests, may in fact overpay managers in order to maximize controllers’ consumption of private benefits, due to their close social and business ties with professional managers or for other reasons, such as being captured by professional managers. This tendency to overpay managers is further aggravated by the use of control-enhancing mechanisms, such as dual-class structures, which distort controllers’ monitoring incentives. The Article uses a unique approach to question conventional beliefs on executive pay by reviewing the ISS recommendations on say-on-pay votes, finding empirical indications that compensation packages in U.S. controlled companies appear to be a bigger problem than initially predicted. It, then, concludes by calling for a new regulatory approach: reconceptualize the pay of professional managers in controlled companies as an indirect, self-dealing transaction and subject it to the applicable rules that regulate conflicted transactions

Entrepreneurial Networking in China and Russia: Comparative Analysis and Implications for Western Executives

In this article, I compare personal networks of Chinese and Russian entrepreneurs in terms of network structure, relationships and resources accessed in networks. The Chinese data is composed of longitudinal phone interviews with 94 Internet entrepreneurs in Beijing, and the Russian data is comprised of longitudinal face-to-face interviews with 75 entrepreneurs in Moscow, Ekaterinburg and Petrozavodsk. Implications for Western executives are discussed.http://deepblue.lib.umich.edu/bitstream/2027.42/39905/3/wp520.pd

The Strength of Direct Ties: Evidence from the Electronic Game Industry

We analyze the economic effects of a developer’s connectedness in the electronic game industry. Knowledge spillovers between developers should be of special relevance in this knowledge-based industry. We calculate measures for a developer’s connectedness to other developers at multiple points in time. In a regression with developer, developing firm, publishing firm, and time fixed effects, we find that the number of a developer’s direct ties, i.e., common past experience, has a strong effect on both a game’s revenues and critics’ scores. The intensity of indirect ties makes no additional contribution to the game’s success