Bandwidth and Echo: Trust, Information, And Gossip in Social Networks

Summary of: Bandwidth and Echo: Trust, Information, And Gossip in Social Networks

Author(s) / Editor(s)

Network closure produces echo, gossip that reinforces dispositions rather than increasing information flow or the kind of trust that increases social capital.

Publication Reference

Published in/by
Pre-print for a chapter in Networks and Markets: Contributions from Economics and Sociology
Date
2001
Source
Edited by Alessandra Casella and James E. Rauch, Russell Sage Foundation

Findings

  • Bandwidth hypothesis: "The bandwidth prediction is that ego's opinion of alter is correlated with third-party opinion, and networks evolve toward a state of balance in which people bound by a strong relationship have similar opinions of others."
  • Echo hypothesis: "Echo results from etiquette biasing the information that third parties disclose to ego. [...] The echo prediction is that stronger third-party ties foster more intense ego opinion such that relations adjacent in a network need not be balanced in their direction (I trust friends of my friends), so much as their intensity (I have an opinion, positive or negative, of my friends' friends)"

The competitive advantage that social networks create is called social capital. Empirical evidence shows that brokerage between interdependent groups that specialize on different things creates more social capital than simply a high number of relationships among individuals (i.e. network closure). However, brokers depend on trust, and trust is frequently viewed to require network closure. The problem with this view is that with increased network closure the value of brokers diminishes which in turn creates less social capital. Part of solving this problem is to figure out whether network closure really does produce the kind of trust that increases social capital. Burt shows that trust created by network closure might be ill-founded.

The relationship strength between ego and alter correlates with the amount of trust between ego and alter. In a social context ego also receives gossip about alter, i.e. information about alter via third parties. The bandwidth hypothesis states that gossip nework closure increases information flow reinforcing and fine-tuning trust relationships beneficial to social capital. The echo hypothesis states that gossip network closure does not so much increase information flow but reinforces dispositions. This is due to a commonly observed etiquette in informal conversations where third parties only reveal information about alter to ego that concur with ego's opinion of alter. The motivation for this etiquette are civility, efficiency, and the important role gossip plays in creating and maintaining relationships.

Analysis of survey network data of three study populations consisting of senior managers in a leading manufacturer of electronic components and computer equipment, of staff officers in two financial companies, and a bankers in the investment banking division of a large financial company shows that trust can develop within negative third-party ties ("an enemy of my friend is my enemy" or "a friend of my enemy is my enemy"), and distrust can develop within positive third-party ties ("a friend of my friend is my friend" or "an enemy of my enemy is my enemy") which is consistent with the echo hypothesis but not with the bandwidth hypothesis.

"Strong connection through third parties increases the probability of social reinforcement such that network closure creates echo, not accuracy. [...] Therefore, network closure does not facilitate trust so much as it amplifies dispositions, people cannot learn of what they do not already know" which negatively impacts social capital.