Behavioral Consequences of Embeddedness

Abstract

Network structures have strong effects on the frequency and terms of negotiated exchanges, shaping who exchanges with whom and who fares better or worse. In this study we ask how exchange patterns of commitment and inequality are affected when negotiated exchanges are combined with reciprocal exchanges in more complex relationships of embeddedness. Drawing on the organizational literature on embeddedness and economic performance and the social exchange literature on forms of exchange and integrative bonds, we predict that embedding negotiated exchanges in a relationship of reciprocal exchange will increase the strength of behavioral commitments and reduce the effects of structural power differences on inequality. We base these predictions on two theoretical mechanisms that link forms of exchange to bonds of attachment: the relational climate of trust and solidarity created by reciprocal exchange, and the more cooperative task structure of negotiated exchange. A laboratory experiment provides substantial support for our logic and predictions.