Multiplexity and the Tolerance of Failure

• In Event: 118 - Section on Economic Sociology Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 18. Social Networks

Abstract

Exchange relations rely on the mutual confidence that each party will fulfill its contractual obligations. When one party fails to meet its obligation, the contract is broken and the exchange relation should cease. Yet, examples abound of such relations continuing despite transactional failures. This study considers the role of relational dimensionality, or multiplexity, in the maintenance of underperforming ties. We expect multiplexity to provoke a re-evaluation of an exchange actor’s identity hierarchy. If the actors’ identity hierarchies are similar, the exchange relation will be strengthened and failure will be tolerated. We leverage the salience of transactional failure in the context of startup investments to experimentally evaluate the effect of multiplexity on relational commitment. We find that the effect of multiplexity depends on the population, supporting the role of identity distance in actor bonding.

Author

• Jessica Santana, Stanford University