The Prince and the Pauper: Search and Brokerage in the Initiation of Status-Heterophilous Ties

Abstract

We combine structural hole theory with performance-feedback theory to identify determinants of partner selection in networks. Specifically, we examine how a brokerage position coupled with aspiration-performance gaps affect an organization’s propensity to initiate ties to partners of different status. We find that organizations in brokerage positions are more likely to systematically initiate such ties than non-brokers. However, when the performance of an organization in a brokerage position deviates from its aspirations, this organization changes its partner selection strategy and starts initiating ties to partners of similar status. Our results also suggest that organizations in brokerage positions set social and historical aspiration levels differently from non-brokers, which in turn affect their partner selection decisions.