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 affects an organization's propensity to initiate ties to partners of different status. We find that organizations in brokerage positions are more likely than nonbrokers to initiate such ties systematically. However, when the performance of an organization in a brokerage position deviates from its aspirations, the 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 nonbrokers, levels that in turn affect decisions about partner selection.