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  • 2019
  • Article
  • Nature Communications

Structural Balance Emerges and Explains Performance in Risky Decision-Making

By: Omid Askarisichani, Jacqueline N. Lane, Francesco Bullo, Noah E. Friedkin, Ambuj K. Singh and Brian Uzzi
  • Format:Print
  • | Pages:10
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Abstract

Polarization affects many forms of social organization. A key issue focuses on which affective relationships are prone to change and how their change relates to performance. In this study, we analyze a financial institutional over a two-year period that employed 66 day traders, focusing on links between changes in affective relations and trading performance. Traders’ affective relations were inferred from their IMs (>2 million messages) and trading performance was measured from profit and loss statements (>1 million trades). Here, we find that triads of relationships, the building blocks of larger social structures, have a propensity towards affective balance, but one unbalanced configuration resists change. Further, balance is positively related to performance. Traders with balanced networks have the “hot hand”, showing streaks of high performance. Research implications focus on how changes in polarization relate to performance and polarized states can depolarize.

Keywords

Polarization; Structural Balance; Performance; Groups and Teams; Risk and Uncertainty; Decision Making

Citation

Askarisichani, Omid, Jacqueline N. Lane, Francesco Bullo, Noah E. Friedkin, Ambuj K. Singh, and Brian Uzzi. "Structural Balance Emerges and Explains Performance in Risky Decision-Making." Art. 2648. Nature Communications 10 (2019): 1–10.
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About The Author

Jacqueline Ng Lane

Technology and Operations Management
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More from the Authors
  • The Subjective Expected Utility Approach and a Framework for Defining Project Risk in Terms of Novelty <i>and</i> Feasibility—A Response to Franzoni and Stephan (2023), ‘Uncertainty and Risk-Taking in Science’ By: Jacqueline N. Lane
  • Creating a Virtual Internship at Goldman Sachs By: Prithwiraj Choudhury and Jacqueline N. Lane
  • The Subjective Expected Utility Approach and a Framework for Defining Project Risk in Terms of Novelty <i>and</i> Feasibility—A Response to Franzoni and Stephan (2023), ‘Uncertainty and Risk-Taking in Science’ By: Jacqueline N. Lane
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