Bargaining and Exchange in Social Networks: Negotiation Outcomes and Structural Dynamics

The study investigated interaction and bargaining between persons embedded in networks. The identification of the (dis-)advantage a network position has for bargaining has not yet been resolved conclusively, even though viewing social interaction as exchanging processes is one of the oldest theories of social behaviour. Unfortunately, the network approach has not yet received enough attention in the social sciences. Therefore, the theoretical models in the realm of sociological exchange theory and the empirical research in laboratory experiments concerning bargaining and exchange in networks do not satisfy the complexity of real transactions.

The project has developed, theoretically and empirically, sociological exchange theory beyond the present state by modelling bargaining and exchange as a non-cooperative game and has tested it in laboratory experiments. The proposed model considers many parameters relevant to bargaining and exchange in social interactions (e.g. network positions and characteristics, rival or complementary goods, other-regarding preferences, risk preferences, age, and sex) and is capable of predicting exchange outcomes and changes to the network (e.g. network breaks).

The central findings are that advantages and disadvantages of network positions (e.g. being central or peripheral) are affected by the type of goods exchanged, personal characteristics such as sex, reservation prices, and risk preferences. However, risk preferences do not seem to affect the final exchange outcome(s) significantly but rather the timing and level of offers and counteroffers.