1. Structural balance emerges and explains performance in risky decision-making
- Author
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Brian Uzzi, Omid Askarisichani, Noah E. Friedkin, Ambuj K. Singh, Jacqueline N. Lane, and Francesco Bullo
- Subjects
0301 basic medicine ,Structural balance ,Science ,Decision Making ,General Physics and Astronomy ,02 engineering and technology ,Models, Psychological ,General Biochemistry, Genetics and Molecular Biology ,Profit (economics) ,Article ,Social Networking ,Microeconomics ,03 medical and health sciences ,Risk-Taking ,Sociology ,Models ,Economics ,Humans ,lcsh:Science ,Social organization ,Text Messaging ,Multidisciplinary ,Interdisciplinary studies ,Polarization (politics) ,Commerce ,General Chemistry ,021001 nanoscience & nanotechnology ,Markov Chains ,030104 developmental biology ,Psychological ,lcsh:Q ,0210 nano-technology ,Social structure - 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., How do socially polarized systems change and how does a change in polarization relate to performance? Using instant messaging data and performance records from day traders, the authors find that certain relations are prone to balance and that balance is associated with better trading decisions.
- Published
- 2019