Other Unpublished Work | 2011

Networks as Covers: Evidence from On-Line Social Networks

by Mikolaj Jan Piskorski

Abstract

Sociologists have extensively documented that networks influence market exchange through improved matching and vouching. In this paper, I propose that networks can also blunt the signal of market participation, as actors who are on the market surrounded by their network are pooled together with those who use their networks for other reasons. To control the clarity of that signal, actors would like to choose strategically whether to appear with their networks on the market. However, reality puts restrictions on their ability to do so. On-line social networks, where actors can always appear with their networks, alleviate these restrictions and make the pooling effect stronger. The consequences of greater pooling on-line differ by exchange type. For example, they are positive for actors who are looking for a job, but are already employed, and so cannot be seen as looking. By pooling themselves with actors who are using on-line networks to utilize their social capital better, the employed job seekers can be on the market, while claiming that they are not. However, the greater pooling has negative consequences for actors who are single and earnestly looking for a spouse. In this market, it is important to signal capacity for commitment, so greater pooling of those who are there only for their friends with those who are ready to commit works against the latter. Data used to derive these arguments come from an extensive qualitative research project with various on-line social networks, recruiters, employees, as well as those who are looking for a job or for a relationship.

Keywords: Job Search; Knowledge Use and Leverage; Market Participation; Market Transactions; Social and Collaborative Networks; Online Technology;

Citation:

Piskorski, Mikolaj Jan. "Networks as Covers: Evidence from On-Line Social Networks." September 2011.