Exclusion and Power: A Test of Four Theories of Power in Exchange Networks

Abstract

We evaluate four theories that predict the distribution of power in exchange networks.All four theories-core theory, equidependence theory, exchange-resistance theory, and expected value theory-assume actors rationally pursue self-interests.Three of the theories add social psychological assumptions that place the pursuit of self interest in an interactive context.Predictions of exchange earnings by the four theories are evaluated against data from eight experimental networks, including types of networks not previously studied.These networks vary conditions that affect the chances that a position can be excluded from exchange.We find that when the theories base predictions on a network position's structural potential for exclusion, exchange-resistance theory provides the bestfit, but when predictions are based on actual experiences of exclusion, expected value theory fits best.Our discussion focuses on the distinction between the a priori potential for exclusion versus experienced exclusion as factors in the genesis of power T he problem of power distribution in ex- change networks has captured the attention of a variety of theorists.The appeal of the problem derives from the combination of the formal representation of social structure as network (Wellman and Berkowitz 1992) and sociology's perennial concern with power.A growing body of experimental studies now permits researchers to test various theoretical formulations.How does location in a network confer advantages on a person or a corporate body in their dealings with others?Consider the promotion prospects of two senior accountants, Andy and Bob.Because Andy's work involves accounts at various regional offices, his coworkers typically do not know each other.Bob, on the other hand, deals with corporate accounts, so his coworkers typically associate with each other.Thus, Andy and Bob are surrounded by two very different networks and it is not obvious that Andy's network favors him for promotion (Burt 1992).In a second ex-ample, a university department searches for a chairperson who can negotiate with the college dean for support for the department.The common intuition that outsiders are more desirable is grounded in a belief that outsiders' network ties provide alternatives that insiders cannot match.These ties strengthen the outsider's hand, giving an outsider more power to negotiate favorable levels of support.The strategic considerations quickly expand as alternatives distant in the network impact on the bargaining power of the dean and the leading candidate.Such considerations lead to the problem of power distribution as it has been addressed in the network exchange literature.This literature investigates the general properties of networks that influence the allocation of valued resources and focuses on how alternative positions remote in the network affect earnings from exchange in the network's ties.We use experiments to evaluate four recent theories that predict power distribution/resource allocation in exchange networks.The four theories are game-theoretic core analysis (Bienenstock and Bonacich