A Novel Experimental Test of Social Network Opportunity and Structure in Entrepreneurial Pitch Evaluation Updating

Abstract

In many facets of life, individuals make evaluations that they often update after consulting with others in their peer networks. But not all individuals have the same positional opportunities for social interaction in a given network, nor the ability and desire to make use of those opportunities that are available to them. The configuration of a person’s network can also alter how information is spread or interpreted. To complicate matters further, scant research has considered how positions in social networks and the valence of network content interact because of: (a) the difficulty of separating the “person” from the “position” in networks and (b) measuring network content. This research develops a novel experimental platform that addresses these issues. Participants viewed and evaluated an entrepreneurial video pitch and were then randomly assigned to different networks, and positions within networks, and thus various opportunities for peer influence. All the content of social interaction, including its valence, was recorded to test underlying assumptions. Results reveal that those assigned to a potential brokerage position in a network updated their evaluations of the entrepreneurial video considerably more negatively, an effect that is moderate further by negative peer effects.

Keywords: Social Evaluation, Peer Effects, Networks, Experiment, Entrepreneurial Pitch, Agency-Structure

JEL Classification: M13, O30, O39, Z13