Social Networks 33 (2011) 143–151

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Social Networks
journal homepage: www.elsevier.com/locate/socnet

Resource characteristics in social exchange networks:

Implications for positional advantage
David R. Schaefer ∗
School of Social and Family Dynamics, Arizona State University, Box 873701, Tempe, AZ 85287-3701, United States

a r t i c l e i n f o a b s t r a c t

Keywords: Despite the wide range of resources that traverse social networks, social exchange research has focused
Social exchange on only a narrow subset. Notably, prior social exchange research has not considered resources like infor-
Resources mation that have the capacity to diffuse through networks. The current study investigates how differences
Power
between the standard social exchange resource and an information-type resource affect the advantage
Advantage
provided by one’s network position. Results of a laboratory experiment support predictions and offer two
Information
new insights to the foundations of positional advantage: (1) the location of advantageous positions in a
network differs by resource characteristics, and (2) only in particular situations is a single position able
to experience high levels of both power and exchange frequency.
© 2010 Elsevier B.V. All rights reserved.

1. Introduction on an experimental protocol that does not allow resources to

The social network and social exchange traditions share a
concern with understanding how network structures impart com-
petitive advantages or other forms of benefit to actors in particular
positions. Notwithstanding their similar orienting frameworks,
research in the two traditions has largely progressed indepen-
dently. Despite an awareness of the fields’ overlap and early
investigations of key differences (Cook et al., 1983; Marsden, 1982),
with few exceptions (e.g., Burt, 1992), recent research has adopted
one perspective or the other. Calls to integrate the two traditions
have been made (Bonacich, 2009; Cook and Whitmeyer, 1992), but
the areas have remained separate, so much so that in “mapping”
the field of social network analysis Borgatti placed social exchange
research on its own island, isolated from social network research
by a wide gulf (2008).
A major barrier to integrating the two traditions is the form of
resources considered. In examining which actors receive resources
the quickest, most directly, or most abundantly, social network
research often presumes there is something “flowing” through
the network (Borgatti, 2005). In many cases information is the
resource of interest and its diffusion is either the driving ques-
tion or a key theoretical mechanism (Burt, 1992; Granovetter,
1973). Social exchange theory focuses on the related question
of how resource exchanges give some actors power over others.
However, social exchange research has focused almost exclusively
∗ Tel.: +1 480 727 8332.
E-mail address: david.schaefer@asu.edu
move through the network (see van Assen (2003) for more than
70 such studies). In fact, no prior social exchange research has
tested how power emerges when actors exchange resources that
have the capacity to diffuse through the network like informa-
tion.
One cannot assume that theories developed and tested using
one type of resource hold when other resources are considered. As
social network research has found, differences in resources (e.g.,
the content of ties) are associated with differences in network
structure (Cross et al., 2001; Lazega and Pattison, 1999; Wellman
and Wortley, 1990) and the type of network positions that are
advantaged (Burt, 1997; Dekker et al., 2003; Flap and Volker, 2001;
Podolny and Baron, 1997; Stokman, 2004). Thus, it is unknown how
well social exchange theories capture outcomes from the exchange
of information-type resources. Broadening the set of resources con-
sidered within social exchange theory is essential to extend the
theory’s explanatory power and increase its relevance to social
network research.
The current research considers how networks produce advan-
tage for two resource forms: (1) the standard social exchange
resource, which is constrained to exchange in a single dyad, and
(2) a resource resembling information that is able to diffuse across
the network as it is exchanged. I explain how differences between
the two resources alter power use and the frequency of actors’
agreements, with consequences for which positions in the network
are advantaged. Results of a laboratory experiment reveal how
differences in resource characteristics alone produce completely
different distributions of power and exchange frequency across a
network.

0378-8733/$ – see front matter © 2010 Elsevier B.V. All rights reserved.
doi:10.1016/j.socnet.2010.12.002
144 D.R. Schaefer / Social Networks 33 (2011) 143–151
2. Theoretical background
2.1. Resources
Social network research has acknowledged the diverse nature
of resources and found important differences by type. Given the
same set of actors, networks of information flow, advice, friendship,
and support all display different patterns (Cross et al., 2001; Lazega
and Pattison, 1999; Stokman, 2004; Wellman and Wortley, 1990).
Even within the same structure, resources can move through the
network along different routes (Borgatti, 2005). Most importantly,
the content of ties is a key factor determining individual outcomes,
including which positions in a network structure are optimal. For
instance, supportive ties provide greater benefits when they are
densely connected, while instrumental ties are more rewarding
when they bridge distinct clusters (Borgatti, 2005; Burt, 1997;
Dekker et al., 2003; Flap and Volker, 2001; Podolny and Baron,
1997; Stokman, 2004).
Social exchange theory intentionally leaves the nature of
resources unspecified. Theoretically, resources are any poten-
tial behavior by one actor that would act as reinforcement or
reward for another actor (Emerson, 1972). Empirically, how-
ever, social exchange research has adopted a standard protocol
in which resources are constrained to be non-duplicable and
non-transferable (Schaefer, 2007). Resources received from others
cannot be exchanged further by their recipient (non-transferable)
and their original provider cannot give the same resource to
multiple recipients (non-duplicable). Operationally, the experi-
menter replenishes the points available for exchange before each
opportunity. Since only newly available points can be exchanged,
not those previously received, resources are effectively non-
transferable. And, resources cannot be duplicated to facilitate
multiple exchanges because a one-exchange rule constrains sub-
jects to exchange with only one partner (Willer, 1999).1 In essence,
resources are “used up” during exchange, such that neither the
provider nor the recipient can use the resource in future exchanges.
As a resource, information has the capacity to diffuse through
a network – a capacity that prior social exchange research has not
allowed. Information departs from the standard exchange resource
in that both its provider and its recipient control the informa-
tion following exchange. The key conceptual distinction is that
the information-type resource is both duplicable and transferable
(Schaefer, 2007), which allows either actor to transmit it to some-
one else in a future exchange. The standard exchange resource is
neither duplicable nor transferable and thus cannot leave the dyad.
The current research investigates how exchange outcomes differ
between the standard social exchange resource as described above
and an “information-type” resource. I assume all other resource
dimensions remain constant.2
2.2. Positional advantage
In examining the implications of resource characteristics, I focus
on two types of positional advantage: the use of power to receive
resources on more favorable terms and the frequency with which
an actor receives valued resources through exchange. Dyadic power
is an actor’s ability to obtain resources at a favorable rate – to get
more at lower cost relative to the partner (Cook and Emerson, 1978;
1
Prior social exchange research has occasionally departed from the standard
resource as a means to manipulate other aspects of exchange (e.g., Markovsky et al.,
1988; Yamagishi et al., 1988; Willer, 2003), but such research has not focused on
resources explicitly and has not considered information-type resources.
2
I assume resources are indivisible and have a stable value, and that actors have
full information about their value.
A
C D E
B
Fig. 1. Study network.
Markovsky et al., 1988). Power use is evidenced by inequality in a
single exchange or cumulatively across multiple exchange oppor-
tunities. Exchange frequency reflects how often actors are able to
acquire the valued resources they desire from other actors, regard-
less of the terms of exchange. The benefits from exchange frequency
are distinct from dyadic power. For instance, actors can benefit
equally through a high volume of exchange on poor terms or a lower
volume of exchange on better terms.
With the standard exchange resource power and exchange fre-
quency are highly correlated. Thus, prior exchange research has
tended to focus exclusively on advantage in the form of power.
However, as discussed below, with information-type resources,
power and exchange frequency are decoupled, allowing actors to
experience one or the other, but not necessarily both. This decou-
pling necessitates the consideration of both outcomes in order to
gain a more complete picture of network-conferred advantage.
3. Implications of resource type
I adopt the following scope conditions of social exchange the-
ory: actors control resources that others value; actors pursue
the resources they value through exchange; and, actors exchange
repeatedly with the same partners (Molm and Cook, 1995). I assume
that actors control unique resources and, in line with prior research,
exchange occurs through a negotiation procedure.3 Thus, actors
can seek all resources available in the network and the acquisi-
tion of one does not affect the value of others. In addition, I assume
resources are replenished regularly, but not after every exchange,
which allows information-type resources to diffuse. In discussing
different types of resources, I identify aspects of network structure
that produce advantages in power and exchange frequency. The
logic presented below applies to all networks; however, I study
Fig. 1 network because it is the smallest network exhibiting the
features necessary to observe effects of resource differences on
power.4
3
Unique resources is the simplest assumption one can make (other than identical
resources, which would preclude the need for exchange). Unique resources also
avoids potentially arbitrary decisions about how resources are distributed, which
are likely to affect the emergence of power.
4
Unlike much exchange research, I do not attempt to make precise point
predictions regarding actors’ payoffs. The goal of this research is to demon-
strate the importance of resources for understanding positional advantage. When
information-type resources are considered, the exchange process becomes signifi-
cantly more complex than with the standard exchange resource. Unfortunately, it
goes beyond the scope of this paper to also develop measures that can predict posi-
tional advantage in any network. Indeed, after 30 years, social exchange researchers
are still refining measures of power in the relatively simpler situation of the standard
exchange resource. Rather, I focus on the logically prior question of where power
imbalances will emerge and who will exchange more often under a broader set of
resource specifications. I identify straightforward principles that can inform future
development of formal measures of positional advantage.
 D.R. Schaefer / Social Networks 33 (2011) 143–151
3.1. Standard exchange resource
The standard social exchange resource emerged as a means to
operationalize negative connections between dyads. Two dyads are
connected when they share a common actor. The connection is
defined as negative when exchange in one dyad inhibits exchange
in the other (Emerson, 1972). Such is the case, for example, when
a seller has two bidders and can only exchange with one of them.
The type of connection between two dyads is important because
it determines how structural power emerges. In negative connec-
tions, power imbalances arise due to exclusion (Markovsky et al.,
1988). Actors are excluded when they have no one to exchange with
because their partner(s) exchanged elsewhere. Excluded actors
increase their future offers in an effort to be included (Cook et al.,
1983; Thye et al., 1997). Thus, powerful positions are those that
are least often excluded from exchange (Cook and Emerson, 1978;
Cook et al., 1983; Markovsky et al., 1988). For example, in the sim-
ple A–B–C network, because B can only exchange with one partner,
either A or C will be excluded. A and C will make future concessions
to B in order to be included in exchange, giving B a power advan-
tage. Importantly, for exclusion to produce power imbalances it
must consistently advantage one actor over another. For instance,
if A and C could also exchange with one another, then none of the
three actors could consistently exclude another. Exclusion would
occur on any single exchange, but no structural source of power
imbalance exists to concentrate advantage in one position.
Positions with access to alternative sources of valued resources,
or better alternatives than adjacent positions, are advantaged by
exclusion. Because exchange research has focused extensively on
power in networks with negatively connected dyads, several algo-
rithms have been developed to predict power use with the standard
resource (Bienenstock and Bonacich, 1992; Bonacich, 1987; Cook
and Emerson, 1978; Friedkin, 1992; Markovsky et al., 1988, 1993;
Yamaguchi, 1996). While differing in the level of power use they
predict, they tend to agree on which position has greater structural
power in any dyad (van Assen, 2003; Willer and Emanuelson, 2008).
One example is the graph-theoretic power index (GPI3 ), which was
developed to predict dyadic power by estimating the probability
of positions participating in exchange (Markovsky et al., 1993).5
Essentially, the algorithm estimates how often exchange would
occur in each dyad if actors chose their partners randomly. Thus,
GPI3 has the added utility of being able to estimate exchange fre-
quency for each position. The GPI3 values for the study network
(Fig. 1) are: A = B = C = .74, E = .77, D = 1.0, suggesting that D will
complete the most exchanges, followed by A, B, C, and E relatively
equally. In terms of power, positions with the greatest likelihood
of participating in exchange have a power advantage over neigh-
boring positions who are more likely to be excluded (Lovaglia et al.,
1995; Markovsky et al., 1988). Comparing GPI3 scores for adjacent
positions reveals that D will develop a power advantage over C and
E because D will never be excluded but will occasionally exclude C
and E. All other dyads are expected to be equal power because no
position can consistently exclude another.
3.2. Information-type resources
Information-type resources differ from the standard resource in
that they have the capacity to diffuse across a network. Social net-
work theory suggests that the capacity to acquire resources such
as information is a function of medial centrality, or being located
between other actors (Borgatti and Everett, 2006). I expect this is
also the case within an exchange framework, where the receipt
5
Other measures make identical predictions for the study network.
145
of resources is conditional upon providing a different resource in
return. Unfortunately, no ideal measure exists to predict central-
ity with resources such as information. As Borgatti (2005) argues,
centrality measures make implicit assumptions about resource
movement, none of which correspond with how information
diffuses across a network. For example, betweenness centrality
(Freeman, 1979) is calculated using geodesics; but, information is
not constrained to travel along the shortest path(s) between actors.
Given the lack of prior research on how information-type resources
diffuse through an exchange network, a better default assumption
is that resource movement is random. Accordingly, I use ran-
dom walk betweenness to predict which positions will receive
information-type resources more often. Random walk between-
ness is medial centrality measure that identifies positions as central
to the extent they are more often located on random walks between
other actors (Newman, 2005). Within the study network, I expect
actors to be advantaged by exchange frequency when they have
greater random walk betweenness. C will be most advantaged
(bRW = .83), followed by D (bRW = .7), A and B (bRW = .5), with E expe-
riencing the lowest exchange frequency (bRW = .4).
Power can also arise when actors exchange information-type
resources; however the process differs in two ways from the stan-
dard exchange resource: (1) exclusion can operate, though in a
different manner than with the standard exchange resource, and
(2) an additional mechanism – ordering – can lead to power imbal-
ances. Information-type resources also differ from the standard
resource in that the conditions necessary for power do not exist
initially. That is, every actor can initially exchange with all possi-
ble partners. The conditions necessary for power only emerge as
the distribution of resources changes following exchange. Social
exchange researchers have not systematically studied the endoge-
nous emergence of power, making it necessary to first identify
the aspects of network structure that produce the preconditions
for structural power. This is complicated by the fact that with
information-type resources, the emergence of power is contingent
upon the sequence of exchanges across dyads. While it is impossible
to predict whether the conditions necessary for power will emerge
during a single opportunity, one may be able to predict where they
will emerge more often on average.
3.2.1. Power through exclusion
The negative connections necessary for exclusion do not exist
initially. Actors are not limited in the number of times they can
exchange information-type resources under their control; thus, in
the study network, D can share the same resource with C in one
exchange and E in another. Rather, the capacity for information-
type resources to be “copied” during exchange allows alternative
sources to emerge over time. Negative connections appear as
resources diffuse across the network to the point where an actor’s
partners control the same resource. For example, referring to Fig. 1,
should A and B exchange information-type resources with each
other, then they come to share the same resources, making the A–C
and B–C dyads negatively connected. Were this pattern of exchange
to occur consistently, C would develop a power advantage over A
and B. C need only exchange with A or B to obtain all their resources,
which allows C to completely exclude the other.
The negative connections that lead to exclusion arise in net-
works that contain cycles, such as the A–B–C subgraph of Fig. 1.
When ego is located on a cycle then ego’s partners on the cycle can
acquire each others’ resources without ego as an intermediary. For
instance, A and B can exchange and receive each other’s resource
without going through C. When this occurs, a negative connection
can develop between ego’s dyads on the cycle (i.e., the A–C and
B–C dyads). Only a cycle can give an actor alternative sources of a
resource that is valued, making it a necessary structural precondi-
tion for the emergence of power through exclusion.
146 D.R. Schaefer / Social Networks 33 (2011) 143–151
One additional condition must be met for cycles to produce
exclusion. Because negative connections only lead to power use
when one actor is consistently able to exclude another, location
on a cycle produces power only when some actors have better
alternatives to exchanging on the cycle than others. Actors with
access to more resources outside a cycle will initiate exchange on
the cycle less often, leaving actors without off-cycle partners to
exchange with someone on the cycle. For example, in the study net-
work, chance alone suggests that A and B are more likely to initiate
exchange with one another than with C because C will occasion-
ally initiate exchange with D. Thus, A–B exchange will occur most
consistently and create a negative connection between the A–C and
B–C dyads that advantages C. The A–C and B–C dyads are the only
dyads where exclusion will consistently arise and favor one actor
(C). In general, actors with better alternatives off the cycle will have
a power advantage over partners on the cycle who have worse or
no off-cycle alternatives.
3.2.2. Power through ordering
Information-type resources allow power to arise through an
additional mechanism: ordering. Ordering occurs within the con-
text of dyads that are positively connected, where exchange in
one dyad is positively associated with exchange in another dyad
(Emerson, 1972). For example, consider the positively connected
I–S–J network in which a student (S) covets a job (J), but must
first complete an internship (I) with another organization and
receive a letter of recommendation. The I–S and S–J dyads are pos-
itively connected because exchange in I–S facilitates exchange in
S–J.
Ordering leads to power imbalances when an actor must
exchange in one dyad before exchanging in another (Corra and
Willer, 2002). This is a special case of positive connections, where
one exchange must temporally precede the other. In the I–S–J net-
work, the S–J exchange is contingent upon a prior I–S exchange.
This exchange sequence gives a power advantage to I, who pro-
vides S with the resource necessary to enter the second exchange
(Corra and Willer, 2002). The student is dependent upon her super-
visor and will work hard to meet or exceed expectations, giving the
supervisor greater power.
Because previous research has imposed ordering on a network
(Corra and Willer, 2002; Schaefer and Kornienko, 2009), measures
to predict where ordering will occur do not exist. In the cur-
rent context, power through ordering will emerge whenever ego
desires exchange with alter, but ego does not have a resource that
alter values. Ego must then exchange in another dyad to obtain a
resource that alter values. For example, returning to the study net-
work, when C and D exchange, they acquire each other’s resources
and cannot exchange again. Were C to acquire a resource from
A or B, then D would become interested in exchanging with C.
But, D would not have a resource that C valued. D would need
to acquire a resource from E to enable exchange with C. Such
a situation gives E an ordering advantage over D. This type of
situation can arise for any position that has at least two part-
ners (anyone but E in the study network). Anyone with multiple
partners may occasionally need to exchange with one partner to
facilitate exchange with another partner. To the extent ordering
consistently favors one position over another, power imbalances
are expected to arise. Given that information-type resources have
not been previously studied within an exchange framework, it is
an open question what sequences of exchange will transpire and
whether ordering will arise in dyads other than D–E. However,
computer simulations suggest that ordering will appear most often
in the D–E dyad, where it advantages E, and slightly more often
than random in the C–D dyad, where D is advantaged (Schaefer,
2007).
3.3. Simultaneous advantage
With the standard exchange resource an actor’s exchange fre-
quency is correlated with power advantage. Actors who avoid
exclusion exchange more often and have a power advantage rel-
ative to partners who exchange less often (Markovsky et al.,
1988). However, with information-type resources, power use and
exchange frequency are decoupled because different structural
conditions produce each form of advantage. Consequently, posi-
tions may be advantaged for one outcome but not the other.
With information-type resources there are two mechanisms
that can produce power. Actors experience a power advantage from
exclusion when they are located on a cycle and have better alterna-
tives off the cycle than their partners. Such positions can be more
central in the network than their disadvantaged partners’ posi-
tions, which would create a positive correlation between power and
exchange frequency. In the study network, C has high medial cen-
trality, which provides high exchange frequency, and is on a cycle
that confers power through exclusion. Thus, C could experience
both forms of advantage.
The same cannot be said for power through ordering. Order-
ing advantages actors who are in positions whereby others must
exchange with them to facilitate their own subsequent exchanges.
Such power advantaged positions can be central to the network and
provide high exchange frequency (i.e., D). Alternatively, ordering
advantaged positions may be located in peripheral network posi-
tions that provide low exchange frequency, such as position E. Thus,
power advantages through ordering are not necessarily correlated
with exchange frequency.
4. Method
To test the effects of resource characteristics on each form
of advantage, I devised a laboratory experiment with two condi-
tions corresponding to the standard social exchange resource and
an information-type resource. Participants were undergraduate
students recruited based on their desire to earn money. Partici-
pants were randomly assigned to one of the positions shown in
Fig. 1, where they remained throughout the experiment. Partici-
pants were given detailed instructions on their computer screen,
followed by practice rounds and the experimental exchange phase.
All interactions between participants took place via computer using
a program developed in z-Tree (Fischbacher, 1999). Participants
had information about their potential partners, which they referred
to using a letter, but not other participants or their partners.6 Each
experimental condition included 10 cases with five participants
each.
4.1. Resources
To help distinguish between exchange frequency and power
use, I operationalized resources separately from the payoff from
exchange. Resources were operationalized using indivisible tokens.
Participants were endowed with a single token identified by a
unique letter. Exchange between participants in adjacent positions
was possible if each controlled a token the other had not previ-
ously received. During exchange, participants’ control over tokens
changed depending upon the experimental condition. With the
standard exchange resource, tokens were used up during exchange.
In the information-type condition, participants gained control of
their partner’s token during exchange while retaining control of
6
This reflects the situation in the natural-world where actors are often unaware
of their partner’s other ties.
 D.R. Schaefer / Social Networks 33 (2011) 143–151
their own token. In all conditions, participants’ computer dis-
plays indicated any tokens they had previously received and which
tokens were currently controlled by themselves and their part-
ners.
I operationalized the payoff from exchange using points that
were converted into money after the experiment. Any time two
participants could exchange tokens they were given 24 points to
divide. Participants did not know they were dividing 24 points;
rather, they were able to request 1–24 points from one another.
Requests were then transformed into an offer to the partner. When
participants reached an agreement on how to split the points, each
received their share of the points and their control over the tokens
changed according to their experimental condition. Payoffs were
based solely on the points earned during exchange, not the con-
trol of tokens (which only determined who could exchange with
whom).
For example, when two participants exchanged the standard
resource, each lost control of their own token which prevented
them from exchanging with anyone else. Participants did not
acquire their partner’s token because the tokens were “used up”
during exchange. Rather, each participant received the points
agreed upon during exchange. By contrast, with the information-
type resource, participants retained control of their own token and
gained control of their partner’s token (e.g., a copy was made).
This allowed each participant to use either their original token or
their partner’s token in future exchanges. In addition, participants
received the agreed-upon points.
4.2. Structure of exchange
The exchange phase of the experiment contained several peri-
ods, each with multiple rounds of negotiation. Participants knew
the number of rounds per period but not the total number
of periods. At the beginning of each period participants were
endowed with a token. Throughout the period, participants could
exchange one or more times depending upon experimental condi-
tion.
Within a period, participants had a fixed number of rounds for
negotiations and exchange. Negotiation consisted of a series of
offers and counteroffers over how to split the 24 points. Within
a round, participants simultaneously requested points from each
possible partner while partners made requests from them. After
the round, participants learned what others had offered to them.
If the requests within a dyad summed to 24 or less an exchange
automatically took place, in which case participants received the
agreed-upon points and their computer screens noted which token
had been forfeited and/or received.7 Participants who did not reach
an agreement could accept a partner’s offer, repeat a previous offer,
or submit a counteroffer in the next round.
After an exchange, another round would begin if any two adja-
cent participants controlled tokens that each other valued. If no
more exchanges were possible or the maximum number of rounds
had been reached then a new period began: participants were given
their initial token and the record of tokens received was emptied.
To keep all conditions under 2 h, the number of rounds and periods
varied across conditions.8
7
When requests summed to less than 24 the remaining points went unclaimed.
On average, agreements yielded a summed payoff of 23.17 points. ANOVA results
indicate no differences in summed payoffs over time (four trial blocks), by condition,
or by dyad.
8
The standard resource condition had 80 periods with four rounds each while
the information-type resource condition had 32 periods of eight rounds each. To
give participants the opportunity to exchange resources to their furthest extent, the
information-type condition had more rounds, which necessitated fewer periods in
order to keep the length of the experiment the same.
147
4.3. Exchange outcomes
Exchange frequency was calculated as the average number of
exchanges per period (the total number of completed exchanges
divided by the number of exchange periods). To measure power at
the dyadic level, I calculated the proportion of points exchanged in
a dyad that actors in each position received. For example, A’s power
relative to B was:
PointsAB
PowerAB =
PointsAB + PointsBA
PointsAB is the total number of points A received from B and
PointsBA is B’s points from A. Since A’s power over B is directly
related to B’s power over A (PowerAB = 1 − PowerBA ) power ratios
are reported once for each dyad. Power-balanced dyads are indi-
cated by power use equal to .5. To facilitate the comparison of
exchange frequency and power as forms of advantage, I also
measure power for each position. Positional power was cal-
culated by averaging a position’s power across all dyads (i.e.,
PowerA = (PowerAB + PowerAC )/2). Because power use takes time to
develop in a network (Cook and Emerson, 1978), the measures of
power in the following analyses were based on the latter half of
exchange periods.
To measure whether each power mechanism created the struc-
tural conditions for power use, I calculated how often exclusion
and ordering appeared in a dyad and which actor was advantaged.
Exclusion occurred when two actors could have exchanged but did
not because ego exchanged elsewhere, leaving alter without an
exchange partner. For each dyad, I first calculated the proportion
of periods in which each actor excluded the other. Then, because
only imbalances in exclusion create power imbalances, I computed
the net difference in the proportion of periods the actors excluded
one another (i.e., the absolute value of the difference between ego’s
exclusion of alter and alter’s exclusion of ego). Exclusion was high
in a dyad if one actor consistently excluded the other and low if two
actors excluded one another at equal rates.
Ordering occurred when ego’s acquisition of a resource made
exchange in another dyad possible. I coded ordering as occur-
ring, and disadvantaging ego, when such situations arose and ego
completed the requisite exchange. This measure does not con-
sider whether ego actually used the acquired resource in a second
exchange, because ordering can produce power regardless (so long
as a second exchange occurs sometimes). As with exclusion, I first
computed how often each actor in a dyad was advantaged over the
other, which I then used to calculate the net difference in advantage
within the dyad.
5. Results
The following analysis proceeds in three steps. I begin by
examining whether the pattern of exchange frequency across posi-
tions differed by resource type. Second, I test whether power
emerged in different dyads depending upon resource type. I inves-
tigate whether the mechanisms of power emerged in each dyad
as expected and led to a power imbalance in the dyad. Third,
I test whether positions simultaneously experienced power and
exchange frequency advantages for each resource type.
5.1. Exchange frequency
I begin by analyzing differences in exchange frequency by posi-
tion and resource type using a two-way ANOVA (with position
as a within-subjects factor). Results indicate significant differ-
ences by condition (F[1,18] = 361.5, p < .001) as expected. With the
standard exchange resource, participants exchanged .76 times per
period on average, compared to 2.20 times per period with the
148 D.R. Schaefer / Social Networks 33 (2011) 143–151

Table 1 power advantage produced by exclusion is evidenced by a corre-

Mean exchange frequency and power by position and resource type.
Position Standard resource Information-type resource
Exchange Positional Exchange
frequency power frequency
A .62b (.15) .51b (.05) 2.05c (.32)
B .71b (.15) .48b (.05) 2.25bc (.38)
C .88a (.06) .50b (.03) 3.36a (.45)
D .91a (.08) .61a (.10) 2.39b (.36)
E .70b (.13) .39c (.11) .94d (.10)
Note: Standard deviations in parentheses. Positions with different superscripts have
different means based on paired samples t tests.
information-type resource. Differences by position existed over-
all (F[4,72] = 96.1, p < .001) and by resource type, as indicated by the
significant position × condition interaction (F[4,72] = 68.6, p < .001).
As shown in Table 1, with the standard exchange resource, C and D
exchanged most often, followed by the other positions. A series of
follow-up t tests reveal that C and D exchanged significantly more
often than A, B, and E. This is largely consistent with predictions
based on theGPI3 , with the exception that C exchanged more often
than expected.
A different pattern of exchange was observed with the
information-type resource. Follow-up t tests reveal significant dif-
ferences between all positions except A and B. The most central
position, C, exchanged more often than D, who exchanged more
often than A and B. The most peripheral position E experienced
the fewest exchanges of all. The rank ordering of exchange fre-
quency across positions is consistent with expectations based on
the random-walk betweenness of positions.
5.2. Power use
I next test how the pattern of power use in the network differed
by resource type (see Table 1). I begin with a two-way ANOVA,
with position as a within-subjects factor. Average power was nearly
equal with either resource type (.50 with the standard resource
and .51 with the information-type resource). Although the main
effect of position was not significant (F[4,72] = 1.2, p = .33), results
indicate a significant position × condition interaction (F[4,72] = 9.9,
p < .001). Follow-up t tests indicate that with the standard resource,
D was the most powerful position in the network, but with the
information-type resource E was the most powerful.
Further insight is gained by examining the occurrence of each
power mechanism and ensuing results for power. With the stan-
dard exchange resource, the only power mechanism that can
operate is exclusion. Exclusion was expected to occur in the C–D
and D–E dyads, and advantage D. As shown in Table 2, the C–D
and D–E dyads displayed exclusion that consistently favored D. The
lation of .35 between exclusion and dyadic power (p = .009) across
all dyads. Thus, as expected, D had a significant power advantage
over C and E. No other dyads exhibited exclusion that consistently
Positional
power favored one position over the other or imbalanced power.
With information-type resources, both exclusion and order-
.47b (.09)
.47b (.04) ing have the potential to create imbalanced power. Exclusion
.55ab (.12) was expected to occur among actors on the A–B–C cycle, where
.45b (.11) exchange creates alternative sources for the same resource. A and
.60a (.11) B were expected to exchange more often and become alternatives
to C because C could exchange off-cycle with D. As shown in Table 2,
C was consistently able to exclude positions A and B, while A and
B did not consistently exclude other actors. Ordering also occurred
in the network, though in different dyads than exclusion. Ordering
favored E over D, D over C, and A over C. Ordering occurred in the
other dyads, but did not consistently favor one actor over the other.
Power imbalances are expected to develop when either exclu-
sion or ordering consistently advantages one actor over another.
To test this relationship, dyadic power was regressed on exclu-
sion and ordering. Results indicate that dyadic power was stronger
when ego excluded alter (ˇ = .359, p = .009) or ego had an ordering
advantage over alter (ˇ = .286, p = .036). Consequently, as shown in
Table 2, power imbalances were observed in the dyads that dis-
played the strongest exclusion (A–C and B–C) and the strongest
ordering (D–E).
In only one dyad was a power mechanism not positively asso-
ciated with a power advantage. D’s ordering advantage over C did
not translate into power over C. One possibility is that ordering
did not occur frequently enough to elicit a power imbalance. It
is likely there is a threshold, whereby a power mechanism must
exist a minimum amount of time to have consequences for actors’
behavior. Unfortunately, no prior research has examined the effect
of variability in the presence of power mechanisms on the emer-
gence of power use. Another possibility is that C’s and D’s other
dyads affected their behavior in the C–D dyad. Recent research has
shown that the value of external dyads affects negotiation behav-
ior in a focal dyad (Schaefer and Kornienko, 2010). C was power
advantaged in its two external ties to A and B, which can raise
C’s expectations regarding exchange outcomes. In contrast, D was
disadvantaged in its external tie to D, which can lower D’s expecta-
tions. In combination, this has the potential to offset D’s potential
for power advantage through ordering.
5.3. Simultaneous advantage
The final question is whether a position’s ability to experience
advantage in the form of power and exchange frequency differs by
resource type. To address this, I compare how positions fared rela-
tive to one another on each outcome and with each resource type.

Table 2
Exclusion, ordering, and dyadic power by dyad and resource type.

Dyada Standard resource Information-type resource

Exclusion Dyadic power Exclusion Ordering Dyadic power

A/B −3.90 (11.14) .53 (.06) .20 (.79) .20 (1.48) .50 (.06)
C/A 3.40 (8.28) .52 (.08) 8.30** (6.67) 1.80** (1.40) .57† (.12)
C/B −.50 (9.29) .52 (.04) 6.70** (6.43) .90 (1.60) .58* (.12)
C/D −22.60*** (6.04) .44** (.07) – −4.00*** (1.94) .52 (.13)
E/D −8.30*** (4.32) .39** (.11) – 6.60** (4.22) .60** (.11)

Note: Standard deviations in parentheses. t tests were used to compare the balance of power mechanism in each dyad to 0, representing the absence of a consistent advantage,
and dyadic power to .5, representing balanced power.
*
p < .05.
**
p < .01.
***
p < .001.
†
p < .10.
a
The means for each ego/alter dyad correspond to ego’s advantage relative to alter.
 D.R. Schaefer / Social Networks 33 (2011) 143–151 149

Table 3 Whereas social network research often considers resources that

Average z scores for exchange frequency and power by position and resource type.
move across a network (Borgatti, 2005), social exchange research
Standard resource Information-type resource has rarely considered resources that can be transmitted between
dyads, and never considered resources like information that have
Position Exchange Positional Exchange Positional
frequency power frequency power the capacity to diffuse across a network. To help bridge this divide
I examined an information-type resource from within a social
A −.92 .17 −.17 −.32
B −.31 −.19 .06 −.38 exchange framework. I contrasted the standard resource used in
C .70 .02 1.37 .37 social exchange research with a resource embodying the charac-
D .91 1.09 .22 −.52 teristics of information. Differences between resources affect how
E −.39 −1.08 −1.49 .85 they move through a network, whether they can be used in multiple
Note: Scores are standardized within condition. exchanges, and their availability to others. Results from a laboratory
experiment demonstrate the multiple ways that resources affect
which network positions are advantaged.
To facilitate comparisons, I standardized each measure of advan-
Going beyond the standard exchange resource revealed a decou-
tage for the resource type (see Table 3; scores are standardized
pling of power use and exchange frequency that enabled an
within columns).
examination of their association across network positions. This
I first examine whether positions experienced the same form of
leads to the first major implication of this study: only in certain
advantage for each resource type. For exchange frequency, the same
circumstances does a position provide advantages in both power and
positions are advantaged with either resource type, though the rel-
exchange frequency. When the same mechanism produces power
ative advantage of positions C and D switched between resource
and exchange frequency, a single position can experience a simul-
types. For power, however, the relative advantage of positions
taneous advantage. This is the case with the standard exchange
differed more dramatically between the two resource forms. The
resource, where those who avoid exclusion have a power advantage
biggest difference is that with the standard exchange resource, D
and greater exchange frequency. However, with information-type
was most power advantaged and E was least advantaged. However,
resources, power and exchange frequency emerge independently
with information-type resources, D was least power advantaged
and mechanisms can favor different positions for each form of
and E was most advantaged. This is because the power mechanisms
advantage. Consequently, power-advantaged positions may or may
not only differ by resource type, but emerge in different dyads in
not also exchange most often. Only in select circumstances do
the network. While D can exclude E with the standard resource, D is
resources and network structure concentrate power and exchange
subject to an ordering disadvantage to E with the information-type
frequency advantages in the same position.
resource.
This research follows Burt’s call for more research on “trans-
Next, I compare whether the same positions were advantaged
mission mechanisms responsible for the competitive advantage
on power and exchange frequency within each resource type.
of network brokerage,” (2008, p. 966) and offers insight to the
With the standard exchange resource, the same position was most
debate over the advantages provided by structural holes (Reagans
advantaged on both outcomes. D was able to exchange most often
and Zuckerman, 2008). In the study network, C and D occupy
and enjoyed the most power. This was expected because the same
structural holes between disconnected alters. Results of the exper-
principle – avoiding exclusion – is ultimately responsible for both
iment indicate that only in limited circumstances were C and D
outcomes. By contrast, with information-type resources different
advantaged in terms of power and exchange frequency. With the
positions were advantaged for each outcome. C exchanged most
standard exchange resource, D experienced both forms of advan-
often, while E was the most powerful. C’s position provides the
tage; however, with the information-type resource, D was power
medial centrality necessary to receive a variety of resources trav-
disadvantaged. C’s position provided consistently high exchange
eling across the network and C was power advantaged in some
frequency, but C was not as powerful as other positions in the net-
dyads, but not all. By contrast, E was the most power advan-
work with either resource form. Still, C was able to avoid other
taged because E was located in a positions that experienced
actor’s power use, thereby experiencing the autonomy, rather than
power through ordering. Although E’s peripheral position allowed
control, that Burt’s more recent work has emphasized (Burt, 2005).
E to experience power, the position did not allow E to exchange
Thus, structural holes are better positions than average, but no
often, making E the most disadvantaged on exchange frequency.
guarantee for maximizing power and exchange frequency for all
These results indicate that with information-type resources power
resource types.
and exchange frequency are not commensurate forms of advan-
The second major implication of this research is that: no sin-
tage.
gle network position is necessarily advantaged in either power use
Lastly, it is informative to look across the columns in Table 3
or exchange frequency for all resource types. Altering resource char-
to observe how each position’s outcomes vary depending upon
acteristics completely changed the outcomes experienced by all
the resource exchanged and the form of advantage considered. For
actors in the network. Because the mechanism(s) producing each
all positions but C, z scores are both positive and negative. This
form of advantage differ as resource characteristics change, the dis-
indicates that each position’s relative standing varied depending
tribution of advantage across the network changes. Thus, I suggest
upon the resource type and form of advantage. Even C, who was
it is unlikely for a position’s advantage to be robust across resource
never disadvantaged, was only advantaged under particular cir-
forms.9
cumstances. In sum, the ability of a position to offer advantage is
This research helps explain findings that positional advantage
highly contingent upon the resources actors exchange and the form
depends upon relational content. Underlying differences between
of advantage considered.
resources help explain why brokerage positions are more valu-
able when network content consists of impersonal information
6. Discussion rather than socio-emotional resources (e.g., Flap and Volker, 2001;

This research identified resources as a previously unstudied

exchange element with implications for the advantages provided 9
Some positions may be more robust than others. For instance the central position
by network position. Differences in resources mark a key barrier in a star network will always experience the greatest resource breadth, but will only
to the integration of social network and social exchange theories. have a power advantage with non-duplicable, non-transferable resources.
150 D.R. Schaefer / Social Networks 33 (2011) 143–151
Podolny and Baron, 1997) or explicit rather than tacit knowledge
(e.g., Dekker et al., 2003). Brokerage positions are valuable for
acquiring transferable resources like information or explicit knowl-
edge, but offer no advantage for non-transferable resources like
socio-emotional resources and tacit knowledge, which must be
acquired directly from their source.
Investigating how social exchange research can better repre-
sent phenomenon of interest to social network researchers paves
the way for studies of outcomes beyond power and exchange
frequency. Recent social exchange research has considered many
outcomes of interest to social network researchers, including the
development of trust and cohesion in dyads (Lawler et al., 2008;
Molm et al., 2009) as well as the stability of networks (Doğan
et al., 2009). Social network theory only stands to benefit by bet-
ter access to social exchange theories detailing when cohesion will
be isolated to “pockets” within a network (Lawler, 2002), when
instrumental relationships evolve into affective ties (Molm et al.,
2007), and how a network-induced perception of control affects
commitment to a partner (Lawler et al., 2006). Understanding
how the processes behind these outcomes differ under a wider
range of resource conditions that more closely represent those
found in social network research is a useful next step (cf. Schaefer,
2009).
Given this research is a first step in understanding the impor-
tance of resources for positional advantage, several limitations and
future directions remain. To begin, although this research extended
the nature of resources beyond that found in social exchange
theory, resources were still oversimplified. It would be useful to
expand this research by systematically manipulating other facets
of resources and their distribution. For example, the location of
power advantaged positions may be different if the initial distribu-
tion of resources provides alternatives for some actors (Marsden,
1983), if resources are complementary (Yamaguchi, 1996), or if
actors can receive commissions during exchange (Marsden, 1982).
Results may also differ depending upon whether resources depre-
ciate (or appreciate) in value and whether they are operationalized
using pools of points or endowments (Dijkstra and van Assen,
2008). The consequence of resource differences within such dif-
ferent exchange contexts remains to be seen.
Second, an important next step is to develop measures to pre-
dict advantage across a wide range of networks. Several challenges
confront such an endeavor because moving beyond the standard
exchange resource allows the distribution of resources to change
during exchange and power mechanisms to arise endogenously as
resources diffuse. While cycles are necessary for structural power
through exclusion with information-type resources, the length of
cycles will affect resource diffusion and hence the time required
for the structural conditions that enable exclusion to appear. In
addition, predicting power through exclusion will be more difficult
when networks contain multiple, possibly overlapping cycles. Chal-
lenges predicting power through ordering arise when networks
contain positions with degree greater than two, who may or may
not be subject to ordering depending upon the resources available
through each partner.
Lastly, it may be useful to consider whether an actor’s aware-
ness of network structure affects behavior. Though awareness of
the network has not been found to have an effect with the stan-
dard exchange resource (Molm et al., 1999), with information-type
resources, or transferable resources in general, structural power
arises endogenously based on actors’ exchange decisions. If actors
are aware of the structure they may pursue exchanges that do not
create the prerequisites for structural power. Moreover, awareness
of the network may allow actors to strategically choose partners
who provide better access to distant resources, possibly increasing
their diffusion across the network, with consequences for oneself
and others.
Acknowledgments
This research was supported by the National Science Foundation
(#SES-0425431) and the Social and Behavioral Science Research
Institute at the University of Arizona. Special thanks go to Linda
Molm, Miller McPherson, Ronald Breiger, Joeseph Galaskiewicz,
and the members of the Social Psychology Discussion Group for
their valuable comments. I gratefully acknowledge the research
assistance provided by Rebecca Arnold, Ryen Hanna, and Seth
Wright.
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