Description
How do employers, competing in the same markets, come to cooperate? In dyads, cooperation evolves if pairs of actors interact repeatedly, because it is mutually beneficial. Third actors support such dyadic cooperation by circulating information on actors' past behavior allowing actors to avoid non-cooperators. This paper focuses on the role of these third actors in cooperative networks. It shows that third actors establish local hierarchies (transitive triads), rather than horizontal connections (cycles). Local hierarchies may reflect actors' desire to achieve prestige by connecting to higher-standing actors. Empirically, the paper analyzes how employers cooperate in networks by exchanging information on prospective employees (referral networks). It analyzes eight local referral networks in two different economic sectors based on exponential random graph models. Results show that triadic closure in these networks takes a hierarchical (transitive) form, rather than one of horizontal exchange (cycles). It then proceeds to analyze if this form of triadic closure is associated with prestige relying on an auto-logistic actor attribute model. Results show an association between hierarchic triadic closure and prestige measured at the level of organisations. This finding is interesting considering the literature highlighting reciprocity as an important factor facilitating cooperation.
Keywords/Topics
Employer referral networks / inter-organisational networks
