The Missing Link: The Effect of Customers on the Formation of Relationships Among Producers in the Multiplex Triads

Organization Science, Forthcoming

INSEAD Working Paper No. 2010/27/ST

45 Pages Posted: 31 Mar 2010 Last revised: 10 Jun 2010

See all articles by Andrew V. Shipilov

Andrew V. Shipilov

INSEAD

Stan Xiao Li

York University - Schulich School of Business

Date Written: March 31, 2010

Abstract

This paper develops a concept of a “multiplex triad” i.e. triplet comprised of actors playing different roles and interconnected by different kinds of relationships. An example of such triad is a social structure comprising two producers connected via horizontal relationships and a customer connected to producers via vertical ties. Multiplex triads are important drivers of network evolution, but their dynamics remains poorly understood. Although conventional wisdom suggests that horizontal ties between producers are driven solely by their prior interactions, we find that vertical ties drive the formation of horizontal relationships in a multiplex triad. We also find that these triads are affected by the agency of the customers who a) force producers into horizontal relationships with those producers that have protected the customers’ interests in the past and b) prevent closure in triads containing strong horizontal relationships due to the divergent objectives of these triads’ members. By drawing attention to the existence of multiplex triads and their underlying dynamics, this paper advances a novel view on transitivity incorporating conflicting interests and agencies of actors within social systems.

Keywords: Partner Selection, Horizontal Ties, Vertical Ties, Customer-Supplier Relationships

Suggested Citation

Shipilov, Andrew V. and Li, Stan X., The Missing Link: The Effect of Customers on the Formation of Relationships Among Producers in the Multiplex Triads (March 31, 2010). Organization Science, Forthcoming, INSEAD Working Paper No. 2010/27/ST, Available at SSRN: https://ssrn.com/abstract=1582524

Andrew V. Shipilov (Contact Author)

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau
France

Stan X. Li

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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