Networks and Markets argues that economists' knowledge of markets and sociologists' rich understanding of networks can and should be combined. Together they can help us achieve a more coherent view of economic life, where transactions follow both the logic of economic incentives and the established channels of personal relationships. Market exchange is impersonal, episodic, and carried out at arm's length. All that matters is how much the seller is asking, and how much the buyer is offering. An economic network, by contrast, is based upon more personalized and enduring relationships between people tied together by more than just price. Networks and Markets focuses on how the two concepts relate to each other: Are social networks an essential precondition for successful markets, or do networks arise naturally out of markets, as faceless traders build reputations and gain confidence in each other? The book includes contributions by both sociologists and economists, applying the concepts of markets and networks to concrete empirical phenomena. Among the topics analyzed, the book explains how, in Taiwan, South Korea, and Japan, firms combine into tightly-knit business blocs, how wholesalers in a Marseille fish market earn the loyalty of customers, and how ethnic retailers in the U.S. share valuable market information with other shopkeepers from their ethnic group. A response to each chapter discusses the issue from the standpoint of the other discipline. Sociologists are challenged to go beyond small-scale economic exchange and to integrate their concept of networks into a broader understanding of the economic system as a whole, while economists are challenged to consider the economic implications of network ties, which can be strong or weak, unconditional or highly contingent. This book proves that both economics and sociology provide stronger insights when they study markets and networks as parallel forms of exchange. But it also clarifies the healthy division of labor that remains between the two disciplines. Sociologists are adept at showing how markets are framed by social institutions; economists specialize in explaining how markets perform, taking the social context as a given. Networks and Markets showcases what each discipline does best and reveals where each discipline would do better by borrowing from the other.

In Markets from Networks, one of America's most influential sociologists unveils a groundbreaking theory of the market economy. Arguing that most economists use overly abstract models of how the economy operates, Harrison White seeks a richer, more empirically based alternative. In doing so, he offers a more lucid, generalized treatment of the market models described in his important earlier work in order to show how any given market is situated in a broader exchange economy. White argues that the key to economic action is that producers seek market niches to maximize profit and minimize competition. As they do so, they base production decisions not only on anticipated costs from suppliers and anticipated demand from buyers, but also by looking at their competitors. In fact, White asserts, producers act less in response to actual demand than by anticipating it: they gauge where competitors have found demand and thus determine what they can do that is similar and yet different enough to give themselves a special niche. Building on these and related insights, White creates new mathematical models of how the economy works and how the interaction of its sectors creates mutual protection from the uncertainties of business. These models provide new ways of accounting for profits, prices, market shares, and other vital economic phenomena. He shows, for example, that prices are determined by the coalescing of local variables rather than set in terms of averages as implied by the ''law'' of supply and demand. The model of ''pure'' competition favored by economics is deficient, he concludes, as it fails to account for the varied circumstances of particular industries. Throughout, White draws extensively on case studies of American businesses and on recent mathematical and sociological work on networks. Rivaling standard economic theories with its rich empirical grounding, sheer originality, and scholarly rigor, Markets from Networks will resonate in economics and economic sociology for years to come.

Reveals the interdisciplinary field of networks, which changes how we look at social, financial and technological interactions in modern society

Despite the negative press Asian economies have received in connection with the recent financial crisis, their record of spectacular growth over the past few decades remains irrefutable. In an effort to provide a rich, textured analysis of these economies, editor W. Mark Fruin presents a collection of essays that explores the wide range of network organizations that have been established in the Pacific Rim. Conventional studies of economic organization have tended to center on markets and hierarchies, the two forms of organization most common in the West. But today the world moves too quickly and too unpredictably for the idealized organizations of microeconomic theory to keep up. It is no accident that the region that has generated the world's most explosive economic growth is also the region where network organizations--sets of independent actors who cooperate frequently for mutual advantage--are most pervasive. Rapid economic, social, and technical changes favor the formation of network organizations, and vice versa. The contributors to this volume identify and elucidate four basic types of networks: naturally occurring networks, market replacing networks, hierarchy replacing networks, and market enhancing networks. They show how all of these have been shaped by the history, government, legal system, and culture of each country under consideration. These network organizations allow the authors to compare and contrast network forms in China, Japan, South Korea, Taiwan, and the United States according to features such as degrees of formalization, rule definition, and market conformance. The works collected here make an important contribution to a networks-markets- hierarchies framework that recognizes and emphasizes the diversity of organizational forms and behaviors. A unique resource for scholars and professionals in the fields of management and economics, this book enables a complex analysis of one of the world's fastest growing and most theoretically challenging regions.