Linda D. Molm

Risk and Trust in Social Exchange: An Experimental Test of a Classical Proposition

The classical exchange theorists proposed that trust is more likely to develop between partners when exchange occurs without explicit negotiations or binding agreements. Under these conditions, the risk and uncertainty of exchange provide the opportunity for partners to demonstrate their trustworthiness. This study develops the theoretical implications of this proposition and conducts an experimental test that compares levels of both trust and commitment in two forms of direct exchange, negotiated and reciprocal. The results support the classical proposition, showing that reciprocal exchange produces stronger trust and affective commitment than negotiated exchange, and that behaviors signaling the partners trustworthiness have greater impact on trust in reciprocal exchange.

Dependence and risk: transforming the structure of social exchange

Two forms of relations - dependence and interdependence - are the basis for two distinct types of social structure: 1) exchange relations and networks, and 2) groups. The structure of mutual dependence that underlies all social exchange relations is riskier than the structure of interdependence that underlies cooperation in groups. I argue that the risk of dependence is reduced, to varying degrees, by the way in which transactions are structured and organized over time. I discuss: 1) the form of transactions (negotiated or reciprocal) and 2) the relations between sequential transactions (independent or serially dependent). Both negotiated transactions and serially dependent transactions reduce risk, in different ways and to varying degrees

The Structure of Reciprocity

Reciprocity is one of the defining features of social exchange and social life, yet exchange theorists have tended to take it for granted. Drawing on work from a decade-long theoretical research program, I argue that reciprocity is structured and variable across different forms of exchange, that these variations in the structure of reciprocity have profound effects on the emergence of integrative bonds of trust and solidarity, and that these effects are explained and mediated by a set of risk- and conflict-based processes. I discuss the consequences of this work for organizational theories of embeddedness and the production of social capital through network ties. Finally, I ask how the structure of networks and the structure of reciprocity are related to one another, and explore possible implications of the structure of reciprocity for exchange theorists’ assumptions about actor motivations.

Fragile and Resilient Trust: Risk and Uncertainty in Negotiated and Reciprocal Exchange*

Both experimental and ethnographic studies show that reciprocal exchanges (in which actors unilaterally provide benefits to each other without formal agreements) produce stronger trust than negotiated exchanges secured by binding agreements. We develop the theoretical role of risk and uncertainty as causal mechanisms that potentially explain these results, and then test their effects in two laboratory experiments that vary risk and uncertainty within negotiated and reciprocal forms of exchange. We increase risk in negotiated exchanges by making agreements nonbinding and decrease uncertainty in reciprocal exchanges by having actors communicate their intentions. Our findings support three main theoretical conclusions. (1) Increasing risk in negotiated exchange produces levels of trust comparable to those in reciprocal exchange only if the partners trustworthiness is near-absolute. (2) Decreasing uncertainty in reciprocal exchange either increases or decreases trust, depending on network structure. (3) Even when reciprocal and negotiated exchanges produce comparable levels of trust, their trust differs in kind, with reciprocal exchange partners developing trust that is more resilient and affect-based.

Forms of Exchange and Integrative Bonds Effects of History and Embeddedness

In this study we bring together two sociological traditions: experimental research on how different forms of exchange affect attachments to partners and relationships, and organizational research in natural settings on how embeddedness contributes to social capital. We conceptualize embeddedness in terms of the underlying forms of exchange—negotiated and reciprocal—that are associated with economic exchanges and the social relationships in which they are embedded. Building upon the reciprocity theory of social exchange, we test predictions of how relationship histories (i.e., different sequences of the two forms of exchange) and relationship contexts (i.e., embedding one form of exchange within an ongoing relation of the other form) modify effects of each form in isolation. Results from two experiments show that the reciprocal form of exchange, independent of close ties or personal associations, is critical for producing the strong trust and affective bonds typically associated with embedded relationships. A history or context of reciprocal exchange significantly boosts integrative bonds for negotiated exchange, whereas a history or context of negotiated exchange dampens integrative bonds for reciprocal exchange only moderately. The relative effects of history and context vary by actors’ positions of power.

Punishment Power: A Balancing Process in Power-Dependence Relations

This article analyzes exchange networks that provide actors with two sources of power: power over rewards to others and power over punishment of others. Theoretical analysis of unequal power relations suggests that punishment is the most likely power strategy of actors who are disadvantaged members of relations imbalanced on reward power. A structural advantage in punishment power should provide these actors with the potential means to balance power in the relation. Previous findings have suggested, however, that the high reward dependence of these actors can constrain their use of punishment. This study shows that the use and effects of punishment are significantly altered by the average levels of reward power and punishment power in the relation. The power-balancing effect of punishment is most likely to occur when an actor lacking reward power has punishment power that is strong relative to the other actors but weak in absolute strength.

Is Punishment Effective? Coercive Strategies in Social Exchange

This research tests competing predictions about the effectiveness of coercive strategies in social exchange. Both the classical exchange theories and most bargaining theories argue that the actual use of punishment in exchange relations provokes hostility and retaliation, and leads to a decrease rather than an increase in mutually rewarding exchange. I argue instead that more frequent use of contingent punishment would increase the effectiveness of punishment power. Although the motivation to minimize loss constrains the use of punishment, that motivation should make it highly effective when used. An experiment tested these predictions, using computer-simulated actors who were programmed to employ varying levels of contingent punishment, under different structures of punishment power, against a partner with a reward power advantage. In support of my predictions, more frequent punishment for nonexchange increased the partners reward exchange without increasing retaliation or negative affect. Punishment that was both strong and consistent produced the highest frequency of reward exchange and the least negative affect toward the partner.

Gender and Power Use: An Experimental Analysis of Behavior and Perceptions

Structural theories, expectation states theory and attribution theories of gender and power differ in two important respects: (I) They differ in the correspondence proposed between the effects of gender on behavioral power use and on the cognitive dimensions ofpower use; and (2) they make different predictions about the effects of situational factors such as structural position, legitimation of power and actual performance on the relations between gender and dimensions of power use. This study examined the relations between these variables in a laboratory experiment in which males and females were assigned to different positions of structural power in same-sex or opposite-sex dyads. The analysis showed that gender had almost no independent effects on mean power use or on mean evaluations of the powerful persons personality, competence or power. Gender did have consistent and significant effects, however, on how actual power use and the legitimation of power affect evaluations of the powerful person. The implications of the findings for the three theories andfor applied settings are discussed. The widespread association of gender with status has served as the basis for several theories of how gender influences the use of power and evaluations of the power user. This study compares the predictions of three theories of gender and power that are derived from the broader perspectives of structural theory, expectation states theory and attribution theories. Although these theories all begin with the societal association between gender and status in their explanations, they differ in some important ways. First, they make different proposals about the comparability of the effects of gender on actual power use, and on perceptions, expectations and attributions of power use. Structural and expectation states theories assume that the effects of gender on the behavioral and cognitive dimensions of power will roughly correspond, albeit for different reasons, while situated identity and attribution theories allow for gender-biased evaluations even when behavior is unaffected by gender. Second, the theories make different predictions about the ability of such situational factors as structural position, legitimation of

Gender, Power, and Legitimation: A Test of Three Theories'

Although various theories have been advanced to explain sex differences in the use of power, few empirical studies have examined how men and women actually use power under conditions of structural power imbalance. This study compares prediction from three theoretical perspectives-socialization, structural, and expectation states-in a laboratory experiment on power. Males and females were assigned to the high or low position of structural power/dependency in power-imbalanced dyads, with a partner of the same or opposite sex and with power assignments based on competence (legitimation) or chance. The results indicate that the sex of the more powerful person did not affects power use. Overall power use was affected primarily by the sex of the less powerful person;it was greater when that dyad member was male. The process of power use (wether behavioral influence was ever attempted, and, if so, what patterns of influence were used) was examined to help explain these findings. This analysis revealed effects of legitimation on the dyads with powerful females and helped to explain the effects of the weaker persons sex on power use. Instead of providing unequivocal support for any one of the three theories, the results suggest that structure, socialization, and status expectations are complexly interrelated in their effects on power use.

Social Psychological Perspectives on Power in Organizations

Organizations are characterized by limited resources, conflicting interests, and task interdependencies, which make them rife with political activity. To understand organizational behavior, then, one must understand power, which inevitably shapes how people make decisions, allocate resources, and judge their colleagues. Power is germane to organizational behavior, in the sense that changes in power affect the functioning of any social structure, especially those marked by hierarchical differences. To be effective leaders, managers must be able to diagnose who has power, how it is obtained, and when it can be wielded effectively in order to advance their political goals and, in turn, benefit their constituents. In the past, researchers who study power in organizations have typically focused their attention on identifying important antecedents and consequences—what serves as a source of power and what happens when power is used? More recently, a firestorm of research in psychology has investigated a different question that is of great interest to micro-organizational behavior scholars: What is it like to have power? More specifically, how does power affect the thoughts, feelings, and behaviors of its possessors and their peers? The psychology of power, once the subject of mere conjecture and speculation, now serves as the target of direct empirical investigation. The results of empirical research on the social psychology of power have tended to appear in the pages of disciplinary journals (e.g., sociology and psychology journals) rather than management journals. The primary goal of this special issue is to advance this research domain while connecting it to an audience of organizational scholars. This connection needs to be strengthened because the psychological experience of power is central to the study of organizations. By fostering this connection, we aim to help generate sound theory around the social psychology of power in the workplace. We further hope to inspire young scholars interested in organizational behavior to study power, using state-of-the-art methods and techniques of manipulation and measurement. In general, we need to understand the key psychological factors that