Cooperation Beyond the Network

65 Pages Posted: 4 May 2021

See all articles by Ronald S. Burt

Ronald S. Burt

University of Chicago - Booth School of Business; Bocconi University - Department of Management and Technology

Sonja Opper

Bocconi University - Department of Management and Technology

Håkan J. Holm

Lund University - Department of Economics

Date Written: February 6, 2021

Abstract

It is well known in economics, law, and sociology that reputation costs in a closed network give insiders a feeling of being protected from bad behavior in their relations with one another. A person accustomed to doing business within a closed network is therefore likely to feel at unusual risk when asked to cooperate beyond the network because of absent reputation-cost security. It follows that business leaders in more closed networks should be less likely to cooperate beyond their network (H1). Success reinforces the status quo. Business leaders successful with a closed network associate their success with the safety of their network, so they should be even less likely to cooperate with a stranger (H2). We combine network data from a heterogeneous area probability survey of Chinese CEOs, with a behavioral measure of cooperation, to show strong empirical support for the two hypotheses. CEOs in more closed networks are less likely to cooperate beyond their network, especially those running successful businesses: Successful CEOs in closed networks are particularly likely to defect against people beyond their network. The work contributes to a growing literature linking network structure with behavior: here, the closure that facilitates trust and cooperation within a network simultaneously erodes the probability of cooperation beyond the network, thereby reinforcing a social boundary around the network. Taking our results as a baseline, we close sketching new research on personality, homophily, network dynamics, and variation in the meaning of “beyond the network.”

Keywords: cooperation, social networks, network analysis, economic sociology, entrepreneurship, China

Suggested Citation

Burt, Ronald S. and Burt, Ronald S. and Opper, Sonja and Holm, Hakan J., Cooperation Beyond the Network (February 6, 2021). Organization Science, Forthcoming, Bocconi University Management Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3839284 or http://dx.doi.org/10.2139/ssrn.3839284

Ronald S. Burt (Contact Author)

University of Chicago - Booth School of Business

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-0848 (Phone)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Sonja Opper

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Hakan J. Holm

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden

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