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Two Approaches to Social Structure: Exchange Theory and Network Analysis

Author(s): K. S. Cook and J. M. WhitmeyerSource: Annual Review of Sociology, Vol. 18 (1992), pp. 109-127Published by: Annual ReviewsStable URL: http://www.jstor.org/stable/2083448.

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2/20

Annu.

Rev. Sociol.

1992.

18:109-27

Copyright

?

by Annual

Reviews

Inc. All rights

reserved

TWO

APPROACHES

TO

SOCIAL

STRUCTURE:

Exchange

Theory

and

Network

Analysis

K.

S.

Cook

and

J.

M.

Whitmeyer

Department

of Sociology,

University

of

Washington, Seattle, Washington

98195

KEY WORDS:

social

exchange,

exchange

networks,

power,

social networks

Abstract

Much convergence

exists

between

exchange

theory

and

network

approaches

to social structure.

Starting

with the

work of Emerson,

exchange

theory

increasingly

has considered

social

structure

explicitly,

as both product

and

constraint.

Exchange

theory

and network

analysis

both conceptualize

social

structureas a configurationof social relationsand positions, i. e. as a set of

actors diversely

linked into

networks.

Exchange

theory

and

most

work

in

network

analysis

are based

on

similar conceptions

of the

actor.

Where ex-

change theory

and network

analysis

differ

is in their

view of

the

links between

positions.

Exchange

theory

stresses

the exchange

aspects

of

all ties

and

contends that

the appropriate

etwork

in

any

analysis

is one that

contains

all

relevant

exchange

relations.

Network

analysis

tends

to

be more catholic

about

the nature

of the

links.

INTRODUCTION

Social structure

s

one

of the

central

concepts

in sociological

analysis.

It

is

also at the core

of

many of the

most

influential theories

within

the

field of

sociology.

Durkheim,

Parsons,

Levi-Strauss,

Marx,

Weber,

Merton,

Coser,

109

0360-0572/92/08

15-0109$02.00

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3/20

110 COOK&

WHITMEYER

Blau, Coleman,

and many others have developed conceptions of social

structure n their attempts o provide explanatory

rameworks hat encompass

both humanbehavior and institutionalpersistence and change. Our task here

is to begin to

specify how two different literatures

within sociology can be

brought ogether n

the analysis of social structure nd

structural orms. These

two

traditionsare

exchange theory and network approaches o structure.To

accomplish this task

we provide a brief statement of historical

context,

placing this chapter

n the relevantstreamof work thathas been conductedon

the

topic of social structure. This

statement

is

followed by reviews of the

commonalities and

differences in the approaches o structure aken by ex-

change theoristsand network analysts. We conclude with comments about

future developments linking these two traditions.

A

fairly comprehensive treatment of the different

approaches to social

structurecan be found in the volume edited by Peter

Blau (1975). Various

conceptions of social structureare presentedby authors

hat include Bierstedt,

Blau, Bottomore, Coleman, Coser, Goode, Homans,

Lenski, Lipset, Merton,

Parsons, and

Wallace. Blau identifies three major

approaches o social struc-

ture:

(i)

social structure s a

configuration f

social

relationsandpositions, (ii)

social

structure

as

the substratum hat underlies all of social life and history,

and

(iii) social structureas

a

multidimensional

pace

of

the differentiated

social positions of

the people in a society or other

collectivity (Blau

1975:14).

The

approach

o social structure

adoptedby

exchange

theorists

(including

Blau

1964) and a

majorityof the network analysts is the first alternative,the

configurationalapproach.

We

focus

primarilyupon

this

general approach

o

social

structure.We

omit from our discussion

the structuralism haracteristic

of

Levi-Strauss

(though

this is

mentioned, by

Ekeh

1974,

as a distinct

tradition

within

exchange theory)

and

subsequent

developments along

this

line.

What

Blau refers

to

as

the multidimensional pproach

s

characteristic f

his

more recent work

(e.g.

Blau

1977).

In the next section we first review the

treatmentof social structure

by exchange

theoristsand then move

to

network

approaches.

SOCIAL

STRUCTURE:

AN EXCHANGE PERSPECTIVE

Exchange

theorists advancea basic

image

of social structureas a

configura-

tion

of

social relations

among

actors

(both

individual and

corporate),

where

the

relations involve the

exchange

of valued items

(which

can be

material,

informational,

symbolic, etc). Exchange theory increasingly

has

involved

explicit

consideration of social

structure,

as

both

product

and

constraint,

typically

in the form

of

networks

of social

relations.

We will comment on the

similarities and differences

in

the

perspectives

on social structure

of three of

the

principal

exchange

theorists in historical

progression.



4/20

EXCHANGE HEORY

AND NETWORK NALYSIS 111

Homans' View

of Social Structure

Homans' (1961, 1964) primarypurpose

was the study of

the

subinstitution-

al or elementary orms of behavior.Homans developed a theory of social

behavior based primarilyupon behavioral

principles

of analysis. He

took as

the domain of his explanatory

framework (1961:3),

the actual social be-

havior of individuals

in direct contact

with one another. He refers

to this

behavior as

elementary

and clearly distinguishes

t from behaviorthat

can

be

defined

as

obedience to the

norms of a

society (including

role-related be-

havior). Role-conforming

behaviorwas institutionalized

ehavior, thus actual

behavior was defined by Homans as

subinstitutional.

For Homans, social structuresemerge from elementaryforms of behavior

and

change

over

time

in

response

to changes

in

this

behavior

by aggregates.

(He does not address

n

any detail the complex interplay

between microlevel

processes and aggregate evel outcomes.)

He argued hat

the similar behavior

of

enough people

can alterexisting social structures

nd institutions

and

even,

under some

conditions, replace

them.

Sometimes the

great

rebellions and

revolutions, cracking the institutional

crust, bring out elementary

social be-

havior hot and straight

rom the fissures Homans 1961:398).

His

analysis

of

social behavior enduresas a classic in sociology precisely becausehis vision

of

the underpinnings

f social structureand

institutional orms

is

straightfor-

ward and is linked

so clearly to the actions of individuals

(i.e.

to their

responses to rewarding

and punishing

circumstances).

Though the

focus of Homans' theoretical framework

was the relations

between actors

in

direct contact with

one

another,

he

did

acknowledge

the

structural

mportance

of indirectexchange

relations.

An

example

is the social

relationbetween employees of the

same employer,

who are related indirectly

in second-orderexchange relations through theircommon link to the same

employer.

In this sense the

basic format for

exchange

network

analysis

existed in the earliest formulations.

Blau's Early View of Social

Structure

While Homans' work

is

distinctly microsociological

in

character,

Blau's

(1964) major treatise on exchange

and power

is an

explicit

statement

of the

micro-macro inkage problem,

before micro-macro

ssues became

a fashion-

able

topic

in

sociology

in the

1980s (e.g.

Alexander

et al

1987,

Collins 1981,

Cook

1991,

Huber

1991, etc).

Blau's focus

was the

development

of

a

theory

of

social structure

and institutions based

upon

a

sound

microfoundation,

a

theory

of social

exchange.

Two

major

featuresdifferentiateBlau's

work from

that of

Homans.

First,

Blau did not base his

theory

of

exchange upon

behavioral

principles;

instead he introducedaspects

of micro-economic

rea-

soning

into his

analysis

of

distinctly

social

exchange

(see

Heath

1976).

Second, recognizing

that social structureshave

emergent

properties,

he ex-

tended the

theory beyond

subinstitutional

phenomena.



5/20

112 COOK

& WHITMEYER

Blau discusses processes like group

formation, cohesion, social

integra-

tion,

opposition, conflict, and dissolution in terms of principles of

social

exchange. In his view various forms of social association generated by

exchange

processes over time come to

constitutequite complex social struc-

tures

(and

substructures).The coordinationof action in large

collectivities is

made possible

by common values in the social system which

mediate the

necessary

indirect exchanges. Thus Blau's

theory moves far beyond

direct

contact between

individual actors,

incorporating omplex indirect exchange

processes.

Structural change in both

small and large social structures is

analyzed

in

terms of social forces like

differentiation, ntegration,organiza-

tion, and opposition. Blauand, subsequently,Emerson(1972a,b) both made

power processes centralto their analysis of

the emergenceof social

structures

and

structural

change.

Emerson's

Exchange Network

Theory and Related

Developments

Of

the three

major heorists,

Homanswas the most

psychological

in focus and

thus in

many

respects

the most

microsociological. Blau focused attentionon

the more macro

level, emphasizingmicroprocesses

primarily

as

a foundation

for

building a

more complex theory of

emergentprocesses

in social structures

and

institutional

hange.

Emerson

developed a behavioralmodel of individual

action

but emphasizedthe shift to a

more macro level

of

analysis through

he

incorporation

of

collective actors and networks into his formulation.

As

Turner

1986:304) puts it, Emerson's approach removesmuch of the

vague-

ness

surrounding

Homans' and Blau's

conceptualizations

f

social

structures

as 'institutional

piles'

and

'organized

collectives'. Social structure

n

network

analysis

has a

more

precise

definition

as

patterns

of connections

among

actors

in networks of

exchange relations.

In his

seminal

work

on

exchange

theory

Emerson

(1972ab) produced

a

well-developed

formulationbased

upon behavioralprinciples(similar

to

those

found in

Homans' work). He embeddedhis

generalpower/dependenceprinci-

ple (1962, 1964)

in the

context

of an

exchange

theoretical

rameworkwhich

took

as

its

psychological base,

behavioral

principles

of

reinforcement,

satia-

tion,

extinction,

etc.

Part

II

(1972b)

of

this

work

takes

social structureas the

central

subject

matterand includes

rudimentary

heoreticalstatements

regard-

ing mechanisms of structural hange (see Cook 1987:216-7 for a description

of the model of

social

structure

developed

in

Part

II).

Emerson

(1972a:41)

noted two

major shortcomings

with Homans'

be-

havioral

formulation.

First,

it

had

no

real

conception

of

society except

as an

aggregation

of

individual

behavior.

In

this

sense

its

conception

of

social

structurewas

too

rudimentary.Second,

it

treated

as

given

he

social context

surrounding

behaving persons,

that

is,

the social

structuresand structural

changes

that

sociologists

seek to

comprehend.



6/20

EXCHANGE

HEORY

AND

NETWORK

NALYSIS

113

An

actor in

Emerson's

theory

is

conceived as

a

point

where

many ex-

change

relations

connect

(1972b:57).

The

actor

can be a

person, a

corporate

group

(or

collective

actor),

or a

role-occupant.

This

conception

of

actor

makes

the

theory

applicableat

different

evels

of

analysis,

and the

theory has

been

applied

to

relations

between

individuals,

organizations,

and

even

nation-

states.

The

primary

ocus is

upon

exchange

relationsas

the

building

blocks

for

more

complex

social

structures

alled

exchange

networks

or

corporate

groups

(involving

intragroup

exchanges).

As

Emerson

(1972b:60)

notes,

the con-

cept of an

exchange

relation, and

the

principles

which

surround

t,

provide a

basis

for

studying the

formation

and

change

of

social

structuresas

enduring

relations

among

specified

actors,

with the

exchange

relationsas

the

structural

unit.

Exchange

networks

are

viewed

as

connected

sets of

exchange

relations.

An

early,

important

advance

was the

distinction

between

positive and

negative

exchange

connections. If

an

actor's

exchange

in

one

relation

is

positively

related to

the

actor's

exchange in

another

relation, the

relations

are

positively

connected;

f

the

relationship

s

negative,

they

are

negatively connected'

(for

further

discussion

see

Emerson

1972b).

A

primaryfocus of the

subsequent

theoreticaland

empiricalwork

(e.g.

Cook

1987)

has

been

on

specification

of

the principlesof exchangeandpower thatapplyto differentkindsof network

structures

(which

Emerson

referred

to as

structural

prototypes, such as

monopoly

structures,stratified

networks,

circles, and

chains). In

particular,

attention has

been

focused

on

the

relationship between

types of

exchange

connections and

the

distributionof

power

and

dependence

among

actors

in

various

network

structures

e.g. Cook

&

Emerson

1978, Cook et al

1983,

etc).

Structural

hange

is

viewed in

the

theory

as a

consequence

of

various

social

processes

(e.g. coalition

formation)

n

exchange networks and

within

corporategroups nitiated, n part, becauseof apowerimbalanceeitherwithin

the

exchange

relation

(relational

power

imbalance) or

within the

exchange

network

structure

structuralpower

imbalance) (see

Gillmore

1987,

Cook

&

Gillmore

1984,

Cook

&

Emerson

1978, Emerson

1981,

Molm

1989,

Cook

1990,

etc).

In

conclusion,

exchange

network

theory,

initiated

with

Emerson's

work

(e.g.

1972a,b and

subsequent

work)

and

continuing

in

that of

others

(e.g.

Cook

1977,

Cook

& Emerson

1978,

Willer

&

Anderson

1981,

Markovsky

et

al 1988, etc), has attempted o fuse perspectivespreviously considered in-

compatible

(see

Blau

1975,

Merton

1975),

incorporating

both

psychological

factors and

social

constraints

n

terms

of

alternatives

and

opportunity

struc-

'The

actual

definitions

(Emerson

1972b:70)

are: a

negative

connection

is one in

which

an

increase in

the

frequency

or

'magnitude '

of one

exchange in

which an

actor is

involved

produces

or

implies

a

decrease

in a

second

such

exchange.

A

positive

connection

is one in

which an

increase in one

exchange in

which

an actor

is

involved

producesor

stimulates an

increase in

a

second

such

exchange.



7/20

114 COOK& WHITMEYER

tures. This is, in our view, the majoraccomplishment

of recent developments

in exchange theory (referred to as either

structuralversions of exchange

theory or exchange network heory). It is thismore recentversion of exchange

theory which is most

compatiblewith the fundamental iew of social structure

embedded in much

of the work in network

analysis. We now turn to an

explicit consideration

of the relationshipbetween

exchange theory and net-

work analysis, beginning

with an overview of what network analysis

is.

LINKING EXCHANGE

AND NETWORKAPPROACHES

What is Network

Analysis?

In

discussing the potential

for linking these two

traditionsof work in sociolo-

gy we must begin with

one key difference. Exchangetheory s really the

name

of a class of theories all of which have much

in common (e.g. the theories of

Homans, Blau, Emerson, Thibaut& Kelley,

Coleman etc). Exchange

theory

can be seen as

an

approach o interactionand structure

based on two princi-

ples: (i) The actor

can be modeled as motivated

by interests or rewards/

punishments-i.e. all behaviorcan be seen

as so motivated; ii)

most interac-

tion consists of the exchange of valued (though not necessarily material)

items. Network analysis,

on the other hand, has been less theoretically

and

more empirically

driven (see

Wellman 1983). Network analysis

is

rooted

in

the

empirical

observation

that

patterns

of interaction

of

many

actors can

be

looked at as networks.

A

narrowconception

of network analysis

exists, which considers it a type

of structural

nalysis.

Network

analysts.

.

. try

to describe

[regular

net-

work patterns] and

use

their descriptions

to learn

how network structures

constrain social behavior

and social

change (Wellman 1983:157).

This

version of

network

analysis contends,

in

agreement

with the

structuralist

position

in

Sociology

(e.g.

Blau

1977, Mayhew 1980),

that all

important

social

phenomena

can

be

explained primarily,

if

not completely, by

social

structure.The network

version of this

position

is

professed by,

for

example,

Berkowitz

(1982),

Wellman

(1983),

Skvoretz

(1990), and,

to

some

extent,

Burt

(1982b).

For three reasons, we take

a broaderview of network

analysis.

First, many

network-related tudies

do not fit with the more

narrow

conception

of the

structuralist pproach,

such

as studies of the creation

and/or maintenance

of

networks

(e.g.

Galaskiewicz 1982,

Mizruchi& Stearns

1988),

or with studies

that

investigate

the

influence of non network

factors on network

characteris-

tics

(e.g.

Feld

1981,

Fischer

1982,

Laumann&

Marsden

1982).

We wantedto

include these. Second, by excluding

considerationof the

individual

actor,

the

narrow

structuralistapproach

excludes

linkage

of

network

analysis

with

exchange theory.

We consider such

a

linkage

to be both natural

and

potential-



8/20

EXCHANGE HEORYAND NETWORK

NALYSIS 115

ly fruitful. Third, some

network structuralists

re less strictly structuralist n

practice than in principle

(e.g. Burt 1982b).

Numerous reviews of network analysisexist (e.g. Mitchell 1974, Berko-

witz 1982 ch. 1,

Wellman 1983, Marsden 1990),

so

the history

we present

here is brief. The contemporaryarea of

network analysis has been

formed

through

a

cross-fertilizationof work

from several different disciplines, with

different

empirical

and

even theoretical aims. We can identify

at least three

sources for networkanalysis:empiricalwork

in social anthropology

e.g. Bott

1957, Mitchell 1969,

Kapferer1972), the practiceof sociometry (e.g.

More-

no 1951), and more abstractmathematical

models and theory such

as biased

net theory (Rapoport1957) and graph theory(e.g. Hararyet al 1965). As is

evident in this review, the diversity of origins continues

in the present

diversity

of

subjects

of empirical

research and structural nterests (e.g. net-

work

structure

as an independentor dependent

variable).

The

development

of network analytic tools

and

techniques

proceeded

rapidly, beginning

in the

early 1970s,

among anthropologists

and sociolo-

gists. Debate among

the early network analysts

focused not only on

the

appropriatemeasures

of

importantconcepts

and methods of

data collection

(e.g. observation, diaries, surveys), but also on whetheror not there was

anything

to be called network

theory.

To some

extent,

this debate

con-

tinues. Positions on the

issue

range

from that of

Barnes

(quoted

in

Mitchell

1974:282): there

s no such thing as a theory of social networks,

to that of

Burt (1982b) who formulated

a

structural heory

of action

to

provide

theoreti-

cal underpinning or

network conceptions

of structure.

According

to Marsden

(1990:453),

much network

analysis

can

be

viewed

as

part of

a research

program

o

develop

social structural

measures. These

measurescan then be utilized

by

various theorists

n their efforts

to include in

their theories and

empirical

research measures of

social

structural

concepts

(e.g. range,

centrality,

and

density

of actors' social networks-see

Marsden

1990 for

a

comprehensive

review). For example,

network

analysis

has been

combined

with

functional analysis

and role theory. Recently, proposals

have

been

made to

combine it with

expectation

states

theory (Fararo

& Skvoretz

1986)

and with

Giddens'

structuration

heory (Haines 1988).

From

the

beginning

some network analysts

used

exchange

theory

to

pro-

vide

the theoretical

basis

for

the

analysis

of the

social interactions

they

represented

n

network terms (e.g. Kapferer 1972,

Whitten

& Wolfe

1974,

etc).

Various authors

(e.g.

Turner

1986, 1987,

Collins

1988,

etc)

have

commentedon the

potential

for

linking

exchange

and network

approaches

o

social structure.Collins (1988:412),

for

example,

remarksabout

the

growing

awareness

of

the

connection between

networks

and

market or

exchange

theories...

two

conceptions

of how

individuals

link

together

into

a

larger

social

structure.

n an

influential

review

piece,

Mitchell

(1974)

argued

that



9/20

116

COOK&

WHITMEYER

transactional heories

(including

exchange

theory)

formed a natural

alliance

with network concepts.

Kapferer

(1972) even

proposed

exchange

theory

as

themost suitablebasis for networkanalysis (quoted n Mitchell 1974:282).

We agree with

Kapferer.

However, since

exchange

theory

and network

analysis are

different

types of entities,

it is

difficult to talk

about

integrating

them without

clarifying

the specific

ways

in which they

are compatible

or

incompatible

as perspectives.

One obvious

but relatively

unimportant

iffer-

ence is

in

how

these approaches

are

practiced-how

hypotheses

are tested,

how

the data

are gathered

and analyzed,

etc. More critical

for the

issue of

linkage between

them

are compatibilities

and incompatibilities

n (a ) their

views of action, i.e. the modelsof the actorunderlying ach approach,and (b)

their

views of structure.We

discuss each of these

topics, along

with some

prescriptions

regarding future

developments

that

might integrate

aspects of

these

two traditions

n

ways

quite

fruitful for sociologists.

The Individual-Level

Model

No

two theoretical

approaches

are compatible,

nor

can they be linked

effec-

tively,

if

they

have

fundamentally

different

models of the

individual actor.

We believe thatmost work in networkanalysisis at least compatiblewith the

exchange theory premise

of the

actor as motivated

by

interest

or reward/

punishment.

However,

that which

is not compatible

cannot be linked

with

exchange

theory.

For

example,

Haines

(1988)

advocates basing

network

analysis

in Giddens's conception

of agency -an

alternative

ndividual-level

model incompatible

with

that of exchange

theory.

Similarly,

Fararo

&

Skvoretz

(1986)

suggest

basing

network

analysis

in

expectation

states

theory.

This work may be compatible

with

exchange

theory,

but only

if

the

individual

level models

of

expectation

states

theory

and exchange

theory

are

compatible,

which seems

dubious

(see, e.g.,

Berger

et

al

1972b).

Burt

(1982b)

claims

to have

a different model

of the actor,

but

this is an

overstatement.Exchange theory

analysis

holds

(i)

for

any

model

of

the actor

wherein the

actor

pursues

interests

whatever

they may

be,

and

(ii)

where

at

least some of

the interests

are satisfied

through

social interaction.

Exchange

theory

makes

no commitment

o the

origin

of those

interests, although

some

individual exchange

theorists do

have their

preferred

supplementary,

more

microlevel

models on this

point.

These

may

conflict

with

Burt's

model

which

says

that

an actor's interests

stem

from the actor's network

position.

Howev-

er,

Burt's model

is

fully

compatible

with the

most

basic

principles

of ex-

change

theory. Namely,

Burt's

actors

do have

interests,

some

of

which

they

do

pursue

and

obtain

through

social

interaction.

Biased-net

theorists

(e.g.

Fararo& Skvoretz 1987,

Skvoretz

1990)

claim

that

no individual-level

model is

necessary,

a

position

which

echoes

the

views

of other non

network structuralists

uch

as

Mayhew

(1980)

and

Blau

(1977).



10/20

EXCHANGE

HEORY

AND NETWORK

NALYSIS

117

Biased-net

theory describes

and even seeks

to explain (see Skvoretz

1990)

network

structure as

global

or regional deviations

from

randomness (or

biases ),possibly in a numberof differentdimensions.Contrary o the stated

claim

that no model of

the actor

is necessary, this

theory implies

and indeed

requires

a certain

model of the

actor.

Namely,

actors must exhibit

these

biases,

and apart from

the biases

there can be no

other deviation

of actors'

behavior

from randomness arge

and widespreadenough

to distortthe

picture

of the network.

This model of

the actor

clearly is different

from

that of

exchange theory and

makes these

two approaches

ncompatible.2

One assumption

concerning

the model of

the actor is critical

to much

work

in networkanalysisand exchange theory.This is theassumption hatthe same

model of the

actor can

be used

for organizations or

perhaps

specific types of

organizations

such as

corporations)and

for individual

humans. This

assump-

tion is widespread

among

network

analysts whose

actors are organizations

(e.g.

Laumannet al

1985,

Mizruchi

1989, 1990ab),

and widespread among

exchange

theorists (e.g.

Emerson 1972b,

Markovsky

et al 1988)

and

indeed

some other theorists

in sociology (e.g.

Berger et

al 1989).

Yet

both a priori

considerationsand empirical

evidence call

the assumption

into question (see Caputo1989, Stinchcombe 1989). Social organizationsare

made up

of entities

with their own interests

and

capable

of acting autono-

mously;

human

beings

are not. For example,

in his analysis

of

the

creationof

institutions

by

corporatedonor

and

nonprofitdonee organizations

o

reduce

the transaction osts

of donations, Galaskiewicz

(1982)

must make use

of the

differences

of interests

within organizations.

The issue

of the

validity

of the

organizational

actor

is related to the

extensive debate (cf

Mizruchi&

Schwartz 1987)

between the

resource

depen-

dence and

the social class positions

over the purpose

of

intercorporate

ies

in

the form

of

interlocking

directorates.

The resourcedependenceposition

(Per-

ucci &

Pilisuk

1970,

Pfeffer

1972, 1987,

Pfeffer &

Salancik

1978,

Berkowitz

et al 1978/1979,

Burt et al

1980,

Burt

1983,

Mizruchi

1989, 1990a,b)

argues

that

intercorporate

ies are

created

for

the

purpose

of

maximizing

corporate

profit

through

lessening corporate

dependence,

and

that

they

are

effective at

this. This

perspective

is

strongly

related

to the

exchange theory perspective,

with the

actors

involved being organizational

actors (Berger

et

al

1989).

The

class

position (Zeitlin

1974,

Domhoff

1975,

Soref

1976,

Useem

1978, 1979,

1984,

Bonacich

&

Domhoff

1981,

Gogel & Koenig 1981, Palmer 1983,

Palmer et

al

1986,

Bearden

&

Mintz

1987,

Soref &

Zeitlin

1987,

Johnsen &

Mintz

1989)

argues

that

intercorporate

ies

are created as

a result

of human

individuals

(or

families) pursuing

their

own class interests.

This

position

is

2Some biases

may generate

structurewhich

resembles

that

generated

by exchangeprocesses.

However,

our

concern

here is with differences

in the

underlying

models

of the actor.



11/20

118

COOK& WHITMEYER

also

compatible

with exchange theory

if it is accepted

that

elite

individuals'

personal

nterests

are

congruentwith

their

class interests.

Most

versions of

the

class perspectivefit this formulation.The elite network may be seen as an

example

of a social

circle, a type of social

structure

which Emerson

(1972b)

explains

in exchange

terms. Here, however,

the actorsare

human

ndividuals.

There is some

empirical

evidence

for

each position.

The centrality

of

financial

institutions n

intercorporate

etworks,

for example,

has

been

well

established

(Mariolis

1975, Sonquist

&

Koenig 1975,

Mintz

& Schwartz

1981,

Mizruchi

1982,

Stokman et

al 1984).

Mizruchi

(1989,

1990b)

has

shown

that

intercorporate

etwork positions,

especially

the existence

of

in-

direct links throughfinancial institutions,predict similarityof political be-

havior

(contributions

o PACs). On

the other hand,

Bearden

& Mintz

(1987)

found that

while banks were

indeed central

in the

intercorporate

network,

bankers as

individuals

were not prominent

n linking

roles. Johnsen

&

Mintz

(1989)

looked

at the director

network,

the

dual see Breiger

1974,

Berko-

witz 1982)

of the intercorporate

etwork, and

found

social ties generally

to

be

causally prior

to intercorporate

inks between

individuals.

Studies have

found

a

low rate

of reconstitution

of directorate

ies that

are

accidentally

broken

(Koenig et al 1979, Palmer 1983, Palmeret al 1986).

As

a comment

on both positions

we may add

Galaskiewicz's

(1989)

points,

in

his

presentation

of unresolved questions

concerning

interorganizational

networks

at the metropolitan

evel,

that

(a)

ties

created

for one reason may

be

used

for

another p. 82);

and (b)

creating

ies for

some

purpose

does not

mean

necessarily

that

they

will be effective (p. 86).

Similarly,

we

may

note

that it

is

possible

that interlocking

directorate

ies are

created according

to individual

human interests, yet

other organizational

behavior

is best

explained

by

the

dependence

of

organizational

actors.

This issue is not

yet

resolved.

The View

of

Structure

We can distinguish

two

general

conceptions

of structure

n

network analysis.

The more common

view conceives

of structureas

a

pattern

of

particular

ies

between

actors,

where variation

n

the network

n

the

existence

or

strength

of

ties

is

meaningful

and consequential.

The other

conceives

of structure

as a

general

deviation

from random ies

for

particular

roups,

or

perhaps

he entire

network.

In

other words,

the

first view sees structureas a composition of

particular

ties,

the

second sees

structure

as

a

general

perhaps

multi-

dimensional

deviation from randomness.

The second

view

is

the

biased

net

perspective

(e.g. Rapoport

1957,

Fararo&

Skvoretz 1987).

The first

view is

taken

by

virtually all

other network analysts

and

is

also

that of exchange

theorists

(Collins

1988).

Thus the

general

view of structure

of most

network

analysts

and

exchange

theorists s

the same.

Wheredifferences

exist

is in

their

views

of the details

of



12/20

EXCHANGE

HEORYAND

NETWORK NALYSIS

119

structure-the

ties. These

differences constitute the greatest

challenge to

compatibility

and linkage between the two approaches.

In brief,

fitting their

theoreticalbase, exchange theoristsassume that ties consist of the exchange

of valued items.

Fitting their more empirical

startingpoint,

network analysts

are

frequently

more catholic

about the content of ties (Marsden

1990).

However, there is much variation

in the

treatment of content, between

networkanalysts

and even within the work of

individualscholars.

Frequently,

this

depends

on the aspect

of the structure-action elationship

being

in-

vestigated.

Therefore, we look

at some of the

network analysis literature o

examine the compatibility

of

the exchange theory

stance with

various treat-

ments of tie content.

Virtuallyall studies that undertake

o show

the effects of action on structure

clearly take

ties to consist

of exchange. That is, studies that

look at the

construction

or

maintenance

of networks

(e.g.

Verbrugge

1979, Wellman

1979, Burt 1982a, Feld 1981,

1982, 1984,

Galaskiewicz 1982, Palmer et

al

1986, Suitor

1987, Mizruchi& Steams 1988,

Barley 1990, S.

L. Feld

& J.

J.

Suitor, unpublished

paper,3

N. P.

Hummon, unpublishedpaper4)

or

which

analyze the

effect

of

variation

in

personal characteristics

or

the interests

of

actorson variation n networkcharacteristicse.g. Fischer 1982, Laumann&

Marsden 1982,

K.

E. Campbell

& B. A. Lee,

unpublished

papers5)specify

the ties

in

their

networks

explicitly

or

implicitly

as

exchange

ties.

Thus, they

are

entirely compatible

with

exchange

theory.

The

reasoning

behind

Granovetter's

various

arguments

(Granovetter

1973, 1983) concerning

the

creationand

effects

of

strong

and weak ties

is in

accord

with

exchange theory

principles. For example,

stronger ies mean

more secure access to resources;

thus

those

with fewer

personal

resourcesare more

likely

to rely

on

strong

ties

(Granovetter

1983).

A

few studies undertake

o show the effect

of

structurenot,

or not only,

on

action

but

on

affect (e.g.

Fischer 1982, Marsden1983).

These

studies too take

an

exchange

view

of

ties.

For example,

Fischer

(1982)

finds that network

density

is

positively

related

to

feeling

better

for

low-income respondents,

but

negatively

related for high-income

respondents.

For

an

explanation

he

sug-

gests

that low-income

people

are better

off with dense

cliques because,

unlike

high-income

people, they

lack the

material

and social resources

to

manage

dispersed networks (p. 150).

3S. L. Feld, J.

J.

Suitor,

Mothers and bestfriends: alternative

sources

of social support or

young

married women

in

seven

western countries. Paper

pres. at X

Sunbelt Social Network

Conf.,

1990,

San Diego, Calif.

4N. P. Hummon,

Organizationalstructures

and networkprocesses:

an explorationof

ex-

changeprocesses. Paper

pres. at

X Sunbelt

Int.

Social Network

Conf.,

1990, San Diego, Calif.

5K. E. Campbell, B. A. Lee,

Personal

networks in urbanneighborhoods:

description

and

variation, 1991. B.

A. Lee, K.

E. Campbell,Neighbor

networksof

blacks and whites, Paper

pres. at

ASA Annu. Meet., 1990,

Washington,

DC



13/20

120

COOK

&

WHITMEYER

The

difficulties arise with some studies that examine

the effect of structure

on

action,

or in

some cases, on

other aspects of structure. The exchange

theoryposition concerningthis relationship s that therelevantnetwork s one

that

consists of all relevant and

important ies due to

exchange (i.e. of valued

items)

and only those ties. Granovetter 1985) has

called for acknowledging

the

close embeddedness of

behavior in networks of

interpersonal elations.

Since

interpersonal

relations

are virtually always

exchange relations, the

exchange theory position is

completely

in

agreementwith

his

argument.

The exchange theory

position is compatible with

many network analysis

studies

(e.g.

Marsden

1983, 1987, Coleman 1988,

Ridley & Avery 1979).

However, according to this position, many otherstudies are too permissive.

They include certain types of

ties without

theoretical justification (i.e.

specification in

exchange

terms); they leave out

important ypes of ties and

important actors. They also

fail to pay enough

attention to the interplay

between interestsand the items

being exchanged and to the

differing

effects of

complementary,common,

and

opposing

interests. Thus

they

fail to

perceive

the structural

mplications

of

these few-actor interactional

complexities.

As

examples,

we consider

the

widely used concept of the directionality

of ties as

well as some recent work on centrality.

The

directionality of ties

frequently

is

an

important

factor

in

network

analyses. For

example,

Knoke

&

Burt

(1983)

define

prestige

to be a measure

of the

degree

to which

an actor

is

the

object

of

connections.

However,

whenever a relationconsists of

exchange, any purported

directionality

comes

from

specifying only one side

of the

exchange.

In

such a

case, apparent

directionality

is due

to the

incomplete specification

of content and is a

spurious

factor. For

example,

Knoke

& Burt

(1983;

see

also Burt

1987)

measure the prestige of physicians in terms of being solicited for advice. But

this is

an

exchange:

the solicitation is

exchanged

for advice

(Blau 1955,

Homans 1961). The connection could

just as easily

be specified

with

the

opposite

directionality,

.e.

being

the

object

of

advice-giving. Thus, prestige

stems not

from

directionality

but from the content of the

exchange

relations

and

the

asymmetry

involved.

Centralitygenerally

is

taken to

mean network

position-conferred

advan-

tage.

In the

network

analytic literature,

more

attention

has been

given

to

its

specification

and

measurement han

to

any

other

issue

(e.g.

Bonacich

1972,

1987, Freeman

1979,

Knoke & Burt

1983,

Marsden

1982, 1983, 1987,

Mizruchi et

al

1986, Stephenson &

Zelen

1989,

Friedkin

1991). Recently

some new

measures have been devised

specifically

for

centrality

in com-

munication networks

in

which exchange

is

ignored

(Stephenson &

Zelen

1989,

D. L.

Kincaid, unpublished

paper,6Friedkin

1991). Exchange theory

6D. L. Kincaid,

Communicationnetworkdynamics:

cohesion, centrality,

and

cultural

evolu-

tion,

1990



14/20

EXCHANGE HEORY

AND NETWORK NALYSIS 121

claims that interactions,and by extension the effects of network structureon

action

and structure, occur only due to the exchange value of the items

transferred which may be material, symbolic, informational,etc).7 There-

fore, when the exchange relations in the

network are obscured, the causal

processes involved in centralitywill be likewise hidden. When the exchange

relations are excluded, the results are

likely to be spurious if not in error.

Not all studies involving

communication networks are at odds with ex-

change theory. The effect of network

structure in Bonacich (1990), for

example, is explained as the effect of

network position on the expected

relative gain from communicatingversus not communicating.Network struc-

ture is shown to affect the likelihood of anactorcommunicating n the kind of

communicationdilemma situations studied by Bonacich. In Laumann &

Knoke

(1989; see also Galaskiewicz

1979, Knoke 1983) ties

in the com-

municationnetworkspersist due to the actors' dependenceon the information

and

the similarities in the actors' interests.

Exchange theory, however, suggests an

alternative to be tested against

explanations

in terms of

communication

networks which

ignore exchange

processes. First, all exchange links relevant to the behavior which

is

the

dependent variable should be included in the analysis (see Galaskiewicz

1989). For example, Kincaid (see footnote 6) presents a network of com-

municationconcerning family planningfor

a Koreanvillage (from Rogers &

Kincaid

1981). Are there exchange links to people

with interests

in

the

behaviors n question that are not

represented n the communication

network?

If

so,

it is

likely that exchange theory would make

different calculations

of

centrality

and

perhaps

even different

predictions

concerning

its effects.

Second,

ties

should be considered

n terms of the valued items

exchanged.

According to exchange theory, the very existence of a tie or

link, including

a

communicationtie, suggests the existence of interested

exchange

between

two parties. The content of the communicationsmay be influential,

but even

so the

communicationmust be considered

in the context of an

exchange

of

valued

items, whether hese are

the

communications

hemselves

(i.e.

in terms

of

informationalor symbolic value) or other items.

For

example,

for the

measures

of

centrality

he

proposes

for social

in-

fluence networks, Friedkin(1991) provides

a theoreticalbasis

in

the

form of

coefficients meant to represent one actor's

influence on another.

For an

exchange theorist, however,

this

is

insufficient,

because the

interactional

process goes unspecified. If

the influence does not occur

through exchange

processes

in the

given network, exchange theory suggests

that

relevant ex-

change processes

are

being ignored

and

that the effects

of

the

given

influence

'Exchange theory

does

acknowledge

the

effect of

previously existing ties,

that

is,

of

ongoing

exchange relationships.



15/20

122

COOK& WHITMEYER

channels are

possibly spurious. If the

influence does

correspond o

exchange

processes,

collapsing these into coefficients

obscures

the most interesting

effects of structure.Thusexchange theorysuggests that analysis in light of the

exchange processes

necessarily occurring

(e.g.

in

terms of

the

in-

terdependencies

among the

actors) should be more

revealing of

both the

effects

of structure

and the

underlyingpower and

influence

processes.

Exchange

theorists have

made (and experimentally

demonstrated)

at least

one

importantdiscovery which has had

some influence

in

network

analysis.

This

is the

difference between

positively and negatively

connected

exchange

networks and their

implications for

network-conferred

dvantage see Emer-

son 1972b, Cook et al 1983, Yamagishiet al 1988). We refer to this structural

property

as

polarity.

8

One

reason types of

connections or polarity s

impor-

tant is that for

many networks,

the

distributionof power and

influence may

depend on the

polarity of the network

(Cook

et

al

1983). Thus, Bonacich

(1987)

modified

his

earlier(1972) measureof

centralityso that

it would apply

not just

to positively connected

networks

but to negatively connected

net-

works as

well

(see

also

Marsden 1987; P.

Kappelhoff,

unpublishedpaper9).

The

theoretical reasoning behind

the

concept of

polarity

in

exchange

networktheory can contribute o a solutionof the debate between structural

equivalence

(roughly, having equivalent

ties

to

the same other actors-from

Lorrain & White

1971) and

cohesion (roughly, being

closely tied

to each

other)

as

explanations of the

similarity

of

actors' behavior

(e.g.

Friedkin

1984, Burt

1987, Erickson

1988, Mizruchi

1989,

1990a,

Galaskiewicz

&

Burt

1991). Cohesion is bound into

the veryconcept

of

structural

quivalence

(Borgatti & Everett

1992).

Thus, it is impossible to

distinguish

structurally

between

two-step

(indirect)

cohesion

and

structural

quivalence

(M.

S.

Miz-

ruchi,

unpublished

paper0).

Burt

(1987)

recognizes

this but

makes

it

clear

that at

the heartof

the debate

is a

dispute

over

the

process causing

behavioral

similarity. Cohesion

operates

as

an

infectious process; structural

quivalence

operates

as

a noninfectious

process, perhaps through

imitation.10

Exchange theory suggests that the two

processes are

theoretically

compat-

ible

and possible, even within

the same

network,

and

that which process

is

likely

to

be dominant is

itself affected

by

a

structural

property, namely,

polarity.

In

a

positively

connected

network,

it

is

probable

that cohesion

processes

will

be

stronger.

The common

interestsof the

indirectly

connected

8We introduce a

new term here as a

shorthand or types of connections and/or

degrees

of

connectivity. The term can apply either to

entire networks

(e.g. all relations are

negatively

connected) or to

subnetworks e.g. some relations are

negative and some are positive

as

in

a

mixed

network. See

Yamagishi

et

al

1988.)

9P. Kappelhoff, Power in exchange

systems: a new look at

the Coleman-modelof collective

action, 1990

10M.

S.

Mizruchi, Cohesion,

equivalence,

and

similarity of behavior:

a theoretical

and

empirical assessment, 1990.



16/20

EXCHANGE HEORY

AND NETWORK

NALYSIS 123

actors make it

likely that infectious processes will

lead to similar behaviors

(see Laumann

& Knoke 1989). In a negatively connected

network,

however,

these infectious processes are not likely, and it is probable that structural

equivalence processes will be

more dominant (see

Mizruchi 1990a).

To sum up,

network analysis differs importantly

rom exchange theory

in

two

ways.

First, some network analysts claim to

use a different

individual-

level model, or

to use none. However,

with the notable exception of

biased-

net theory, the individual-level

models of exchange

theorists and network

analysts are fundamentallycompatible,

if not identical.

Second, and

most

critically, network analysts and

exchange theorists

tend to view

certain

aspects of structuredifferently. Their views of what structure s and the

relation between action and structure

are highly

similar. However, they

frequently

differ in their view of

the natureof the ties that make up networks.

For exchange

theorists, network ties consist of exchange

relations

of valued

items, and what

matters causally is the exchange

value (i.e. due to

actors'

interests) of the items exchanged.

Many network

theorists are much more

catholic, and allow a variety of types

of ties independently

of any exchange

of

valued items. There is no theoretical

specification in network analysis

of

the

content of the

tie or social relationship

representedas a link between

actors

or

a line

between

nodes

in

a network. Exchange

theory suggests

ways

of

constructingalternative,

perhaps

superior, explanations

of events within net-

works and of

network effects than

do some of the

more atheoreticalversions

of

network analysis. Whether the

network analysis

or the exchange theory

position is a

more fruitful approach

can only be

resolved through future

empirical and theoretical work.

CONCLUSION

In

the past fifteen years

there

has

been a kind of convergence among

some

of

the

approaches

to social structure

n

sociology.

Two

generally

compatible

approachesare

exchange theory

and networkanalysis. As Collins (1988:412)

points out,

These models

picture

individual

actors

as both

free

and

con-

strained.Humanbeings have

the

capacity

to createor negotiate

whatever

hey

can

at any moment

in time. But

they always

act in a structured ituation,

so

that the consequences and conditions

of their creativity

and

negotiation

are

nevertheless patternedby largerrelationshipsbeyond their control. More-

over, as we have argued

n

this

review, exchange

theory and networkanalysis

have similar conceptions of both

action and structure.

It

is

true that

some

network

analysts

have downplayedany

consideration

of the

individual

actor,

and some exchange

theorists have undertheorized

ocial structure.Neverthe-

less,

the

images

of structureand action Collins

presents

have become

fused

and

are both reflected

in

recent developments

n exchange

network

heory

and

in

much work

in

network analysis.



17/20

124

COOK

&

WHITMEYER

It is a

measure of the progress achieved that earlier statements

regarding

what is central o structural nalysis in

sociology clearly viewed

these alterna-

tives as incompatible (e.g. Blau 1975, Stinchcombe 1975). Nevertheless,

further

theoretical refinements will be required to flesh out

the un-

derdevelopedfeatures of this emerging

general model of social

structureand

action

(see

Hechter 1991).

In

conclusion

it is important o

reiteratea point often lost in debates about

the relative

merits of particular

heoreticalapproaches:no single perspective

or

approach

network analysis and

exchange theory included) can explain all

social and culturalphenomena see, e.g.

Merton 1975). Even the

marriageof

networkand exchange approacheswouldnot be able to lay claim tothe role of

grand theory in

sociology.

Nevertheless, the convergence of

these

two

approaches

does have the potentialto be broader n scope and more

powerful

in

explanatory

erms than either approachalone. For this to happen,

however,

more work needs to

be done clarifying points

of

useful articulationas

well as

areas

of

conflict

or

mutual exclusivity.

Our

review

chapter

s an

attempt

to

initiate this

task.

ACKNOWLEDGMENTS

The authors'

names have been listed

alphabetically. We acknowledge an

earlier

grant

from the

National Science Foundation

SES8519319),

to K.

S.

Cook,

M. R.

Gillmore,

and T.

Yamagishi,

for

support

of the

development

of

exchange network theory.

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