A rational choice model of network status

Braun, Norman

doi:10.1016/s0378-8733(96)00294-8

Cited by 7 publications

(6 citation statements)

References 32 publications

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“…This observation might be helpful for future work on entry and exit into an industry sector. Furthermore, we also recommend that a rational choice model such as Braun's (1997) can be extended easily to accommodate unique elements of a particular sector, just as we were able to do for the ESS industry.…”

Section: Discussionmentioning

confidence: 99%

“…However, Bonacich does not provide a rational argument for the nature and the extent of mediation of the influence of indirectly connected actors (refer to Braun 1997) for a detailed comment). Braun (1997) develops a rational choice model of status that is similar in spirit to other analytical models of network formation (Bala and Goyal 2000), wherein a clear economic rationale is provided for firms' decision to invest in interfirm relationships. Furthermore, Braun also provides a way to compute an empirically tractable measure that can be used in empirical studies of networks.…”

Section: Methodsmentioning

confidence: 99%

“…These still face limitations in that they do not weigh influences from other actors by their structural position. Therefore, in order to accommodate the unique characteristics of ESS alliance networks, where we can consider direct benefits and costs as well as attenuated indirect benefits, we adapted our own structural measure of centrality using Braun (1997) and Bonacich (1987). The derivation of our prominence measure is described in the appendix and specific differences between Bonacich's (1987), and ours is discussed in the online appendix.…”

Section: Alliances and Firm Performancementioning

confidence: 99%

“…We need the prominence measure purely as a function of its network linkages and prominence of the directly and indirectly connected partner firms. So, we endogenize benefit as a function of the innate capability of a firm, similar to Braun (1997) we assume a linear form of b a = 1 + n e a − 1, and substituting for cost, we have for any k, e k = 1 + c k / 1 + n = 1/ 1 + n + 1/ 1 + n · j r kj s j . Multiplying both sides by …”

Section: Appendix Deriving the Prominence Measure For The Ess Industrymentioning

confidence: 99%

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Alliances, Rivalry, and Firm Performance in Enterprise Systems Software Markets: A Social Network Approach

Chellappa

Saraf

2010

Information Systems Research

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E nterprise systems software (ESS) is a multibillion dollar industry that produces systems components to support a variety of business functions for a widerange of vertical industry segments. Even if it forms the core of an organization's information systems (IS) infrastructure, there is little prior IS research on the competitive dynamics in this industry. Whereas economic modeling has generally provided the methodological framework for studying standards-driven industries, our research employs social network methods to empirically examine ESS firm competition. Although component compatibility is critical to organizational end users, there is an absence of industry-wide ESS standards and compatibility is ensured through interfirm alliances. First, our research observes that this alliance network does not conform to the equilibrium structures predicted by economics of network evolution supporting the view that it is difficult to identify dominant standards and leaders in this industry. This state of flux combined with the multifirm multicomponent nature of the industry limits the direct applicability of extant analytical models. Instead, we propose that the relative structural position acquired by a firm in its alliance network is a reasonable proxy for its standards dominance and is an indicator of its performance. In lieu of structural measures developed mainly for interpersonal networks, we develop a measure of relative firm prominence specifically for the business software network where benefits of alliances may accrue through indirect connections even if attenuated. Panel data analyses of ESS firms that account for over 95% of the industry revenues, show that our measure provides a superior model fit to extant social network measures. Two interesting counterintuitive findings emerge from our research. First, unlike other software industries compatibility considerations can trump rivalry concerns. We employ quadratic assignment procedure to show that firms freely form alliances even with their rivals. Second, we find that smaller firms enjoy a greater value from acquiring a higher structural position as compared to larger firms.

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Section: Discussionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Alliances and Firm Performancementioning

confidence: 99%

Section: Appendix Deriving the Prominence Measure For The Ess Industrymentioning

confidence: 99%

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Alliances, Rivalry, and Firm Performance in Enterprise Systems Software Markets: A Social Network Approach

Chellappa

Saraf

2010

Information Systems Research

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“…Among recent contributions are Yamaguchi's (1996) power measure for systems of constrained exchanges, and Braun's (1997) effort to develop a rational choice foundation for network centrality measures by modeling network relations as interindividual investments.…”

Section: Exchange/purposive Action Modelsmentioning

confidence: 99%

The Sociology of James S. Coleman

Marsden

2005

Annu. Rev. Sociol.

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■ Abstract This chapter surveys the career and scholarship of James S. Coleman.It tracks scholarly usage of his work, with attention to references after 1995 and the subject areas in which its use is concentrated. At base a scholar of problems in social organization, Coleman made influential contributions that range across the sociology of education, policy research, mathematical sociology, network/structural analysis, and sociological theory. Works from several phases of Coleman's career are cited widely by scholars in sociology, education, economics, business/management, and other social science fields; during the past decade his conceptual work on social capital has been most influential. Coleman's widely debated Foundations of Social Theory is receiving increasing attention and has helped to establish a stable if limited niche for rational choice analysis within sociology.

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Centrality Orderings in Social Networks

Monsuur¹,

Storcken

Chapters in Game Theory

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A rational choice model of network status

Cited by 7 publications

References 32 publications

Alliances, Rivalry, and Firm Performance in Enterprise Systems Software Markets: A Social Network Approach

Alliances, Rivalry, and Firm Performance in Enterprise Systems Software Markets: A Social Network Approach

The Sociology of James S. Coleman

Centrality Orderings in Social Networks

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