Network Exchange Theory

Background

The intellectual roots of NET can be traced to the classical sociological theories of Karl Marx and Max Weber. Two more recent sources provided the direct inspiration, however: David Willer's “elementary theory” (ET) and Richard Emerson's “power-dependence theory” (PDT). Although offering different basic assumptions and, at times, mutually contradictory predictions, ET and PDT address issues of structural power using a “bottom-up” [Page 531]approach—that is, from a foundation composed of explicit assumptions concerning how individuals make choices in social contexts. Both theories tackle the question of how a social actor (person or group) interacting with others to obtain valued resources realizes advantages or disadvantages due to the pattern or structure of relationships with other actors. Thus, in its own way, each theory focuses on how power—or powerlessness—can arise based on one's social position rather than on one's personal qualities.

Emerson applied his PDT to simple social structures; however, his collaborators at the University of Washington also played a crucial role in extending PDT into the realm of exchange networks. In an influential article published in 1983, Karen Cook, Richard Emerson, Mary Gillmore, and Toshio Yamagishi used PDT to help interpret the ways that actors affect one another directly and indirectly in exchange network contexts. The basic PDT argument is that the power of Actor A over Actor B is greater to the extent that B has low dependence on resources that A controls and that alternative sources for B are readily available. The authors were especially interested in the implications for power and dependence when multiple A–B relationships overlapped, such as in a network of the form shown in Figure 1. If exchange processes in each relationship are permitted to unfold independently, then A has no special advantage by virtue of its central location. However, the moment that events in one “branch” of this little structure affect exchanges in the other branch, it becomes more than just a pair of overlapping A–B exchange relationships: It is an integrated exchange system. Researchers at the University of Washington were especially interested in what transpires under a “1-exchange rule”—that is, in cases where both Bs want to obtain resources through negotiations with A, while A may negotiate and exchange with either B but not with both in a given period of time. PDT could then predict that A has power over the Bs and that A will achieve higher profit than either of the Bs every time an exchange occurs.

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