THE INCIDENCE OF EXCHANGE NETWORKS

This paper advances a line of work on an expected-value model of socia l exchange, in which a power structure indicates opportunities for exc hange and a sample space of exchange networks. When the probability di stribution of the networks in this sample space is known, the expected -value model provides an excellent account of the distribution of bene fits among actors in a variety of power structures. The model would be more elegant if it also predicted the probability distribution of exc hange networks. Furthermore, in its current form, the model fails to a ccount for the observed exchange payoffs in the Kite, a structure that has attracted considerable attention among exchange theorists. Here I advance the expected-value model by deriving the probability distribu tion of exchange networks from a simple process in which the probabili ty of an exchange at time t depends on the value of an exchange at tim e t-I. I show that this approach addresses the anomalies posed by the Kite structure.