Network arrangement that is more unstable in nature. Difficult to establish trustworthiness, reputation, or enforcement of expectations, but optimal in developing more diverse information channels.



Open Networks

Produces stable network environment where trustworthiness and enforcement of obligations and sanctions.  Advantageous for consensus making and internal information distribution since all members are connected to one another.  However, this network arraignment can suffer from inflexibility, information redundancy, and repression.

Closed Networks

The degree of cohesiveness in a network that determines how effectively norms and expectations can be enforced can be placed on other actors.  

- Open Networks 
- Closed Networks

Augustana College (IL)

Coleman critiques and synthesizes two popular academic perspectives on human economic action: Rational Action Theory, and the Socialized Actor.  The Rational Actor perspective claims that agents have control over their resources and actions and can pursue their own self-interest but tends to ignore the external influence of the agent’s social environment.  The socialized view sees human action as a result historical and social norms and values that dictate individual economic decision making but lacks an adequate explanation for internal motivation.  Coleman uses dimensions of Social Capital to bridge the gap between these two perspectives, introducing an theory to human action that both accounts for the influence of social structures on the individual while allowing room for autonomous agency in pursuing economic action.  

Forms of Social Capital

Coleman, James S. 1988.  “Social Capital in the Creation of Human Capital.” American Journal of Sociology, 94:S95-S121.

Social Capital in the Creation of Human Capital

Information is both valuable and costly to acquire as a means for action.  High amounts of this form of Social Capital help facilitate and disperse information through a network more efficiently.  The level of information channels determines how much information an agents can acquire information from their social relations as opposed to having to invest energy acquiring it themselves.

Information Channels

Network Closure

Obligations, as a form of social capital, involve the extension of social credit to other individuals within a network, accompanied by an expectation of reciprocal action. The presence of obligations instills trustworthiness in the social system, allowing agents to reasonably expect that debts will be repaid and that social credit can be extended to others with minimal risk.

Learn Before

Related

Learn After