Does my friend’s social capital become my social capital? : Power-dependence structure within Structural Holes and Network Closure

Yunsub Lee


Two models of social capital—Burt’s structural holes and Coleman’s network closure model—suggest different network situations of how ego’s sparsely or densely connected alters provide ego with benefits. While structural hole theory claims ego’s sparse connections provide ego with more brokerage opportunities between alters, network closure theory argues ego’s dense connections can reduce the risk of failed transactions that comes from alters’ malfeasance. However, both models equally assume that “recipient” ego earns benefits from “donor” alters, overlooking the possible network situations of conflicts and power dynamics between ego and alters, which must exist. Numerous experiments of social exchange theory show that within exchange relations, when alters have less alternative exchange partners, alters are more dependent on exchange relations with ego. The unequal dependency generates ego’s power over alters and thereby it increases ego’s benefits from the exchange relations. On the contrary, when alters have many alternatives, it reduces the dependency of alters and thereby it decreases ego’s benefits due to his or her lower power over alters. From this perspective, the point is that even under same egocentric network situations within structural holes or network closure, ego’s benefits may vary by alters’ egocentric network situations that determine their dependence on the exchange relations with ego. Based on social exchange theory, this study explores power-dependence between ego and alters within structural holes and network closure. Although rigorous experiments strongly support many propositions of power-dependence and various empirical cases show that the models of structural holes and network closure are correct, there is no formal or empirical studies to bridge between the two. In the first part, using agent-based modeling, I suggest new formal measurements of network closure and structural holes that covers the situations of power-dependency between ego and alters. Simulation results reveal that when ego’s dense connections are more overlapped with alters’ dense connections (i.e., shorter network distance between densely connected alters and alters of alters), it increases alters’ dependence on transactions with ego and thereby increase ego’s power. On the contrary, ego can have stronger power when ego’s sparse connections are less overlapped with alters’ sparse connections (i.e., shorter network distance between sparsely connected alters and alters of alters). Linking the simulation results with previous measurements of network closure and structural holes, I formalize two new measurements. In the second part, I test the measurements with IMDB network data. Empirical results support that the new measurements have more explanatory power than previous measurements. When a movie director’s dense/sparse connections with movie actors are more/less overlapped with their dense/sparse connections, the director could earn more benefits from the position within network closure/structural holes, such as longer career maintenance or bigger success of movies.

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