Economics × Sociology: Social Capital and Network Effects

BY NICOLE LAU

Core Question: Are relationships economic assets? This article explores how social capital has economic value, network effects create wealth, trust and reciprocity enable economic transactions, and network structure affects economic outcomes—revealing that relationships are assets (not just social but economic), networks create value (Metcalfe's law, platform economics), social norms reduce transaction costs (trust cheaper than contracts), and sociology and economics converge on fundamental principle: social connections create economic value.

Introduction: Networks Meet Economics

Sociology: social capital (networks, relationships, trust, reciprocity). Weak ties vs strong ties (Granovetter). Structural holes (Burt). Social norms, cooperation. Economics: transaction costs (Coase). Network effects (Metcalfe's law). Platform economics (two-sided markets). Trust reduces costs (Fukuyama). Convergence: social capital = economic value (relationships are assets, networks provide opportunities, trust enables transactions). Network effects = wealth creation (more users → more value, positive feedback, winner-take-all). Trust/reciprocity = economic efficiency (social norms reduce transaction costs, enable cooperation, trade). Network structure = economic outcomes (weak ties → information, opportunities; structural holes → brokerage advantage). Sociology and economics converge: social connections create economic value.

Discipline A: Sociology Perspective

Social capital: Networks, relationships, trust, norms, reciprocity. Social resources (access to information, opportunities, support). Bonding (strong ties—family, close friends), bridging (weak ties—acquaintances, colleagues), linking (vertical ties—different status, power). Putnam ("Bowling Alone"), Coleman, Bourdieu.

Weak ties: Granovetter ("Strength of Weak Ties", 1973). Acquaintances, colleagues. Bridges between groups. Access to diverse information, novel opportunities. Job searches (56% jobs found through weak ties, not strong ties).

Structural holes: Burt ("Structural Holes", 1992). Gaps in network (groups not connected). Broker (connects groups, controls information flow). Brokerage advantage (access diverse information, arbitrage opportunities, innovation).

Trust, reciprocity: Social norms (cooperation, fairness, reciprocity). Trust (belief others will cooperate). Reciprocity (give → receive, social norm, evolutionary advantage). Enable cooperation, collective action.

Discipline B: Economics Perspective

Transaction costs: Coase ("Nature of the Firm", 1937). Costs of economic exchange (search, negotiation, enforcement). Trust reduces transaction costs (cheaper than contracts, lawyers, enforcement). High-trust societies → lower transaction costs → more trade, growth.

Network effects: Metcalfe's law (V = n², value proportional to square of users). More users → more value (telephone, social media, platforms). Positive feedback loop (more users attract more users). Winner-take-all markets (first-mover advantage, lock-in, switching costs).

Platform economics: Two-sided markets (buyers and sellers, users and developers). Platforms facilitate transactions, capture value. Network effects create platform dominance (eBay, Amazon, Uber, Facebook). Platform strategies (subsidize one side, charge other; build network effects, lock-in).

Trust and growth: Fukuyama ("Trust", 1995). High-trust societies (Denmark, Sweden, Norway) → higher GDP, economic growth. Low-trust societies → corruption, inefficiency, lower growth. Trust = economic asset.

Convergence Analysis: Social Capital is Economic Capital

1. Social Capital × Economic Value

Social capital definition: Networks (who you know, connections, relationships). Trust (belief others will cooperate, not defect). Norms (reciprocity, fairness, cooperation). Social resources (access to information, opportunities, support). Putnam: "features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit."

Types of social capital: Bonding (strong ties—family, close friends, emotional support, homogeneous groups, redundant information). Bridging (weak ties—acquaintances, colleagues, information diversity, heterogeneous groups, novel opportunities). Linking (vertical ties—different status, power, access to resources, institutions, authorities). All three types valuable, different functions.

Economic value: Facilitates transactions (networks connect buyers and sellers, reduce search costs, enable trade). Reduces transaction costs (trust cheaper than contracts, enforcement; social norms reduce need for formal institutions). Information asymmetry (networks provide information, reduce uncertainty, enable better decisions). Opportunities (networks provide access to jobs, investments, partnerships, referrals, resources). Trust enables cooperation (prisoner's dilemma—cooperation better if trust, repeated interactions; trust enables trade, investment, innovation).

Measurement: Network size (number of connections, larger network → more opportunities). Network diversity (different types of people, diverse network → more information, opportunities). Network strength (frequency of interaction, trust level, strong ties → emotional support, weak ties → information). Social capital indices (World Values Survey, trust levels, civic engagement, associational membership).

Convergence: Social capital has economic value. Relationships are assets (not just social—economic). Networks create wealth (provide opportunities, reduce costs, enable transactions). Sociology (social capital, networks, trust) and economics (transaction costs, opportunities, value) converge: social connections create economic value. Invest in relationships = invest in economic assets.

2. Network Effects × Platform Economics

Network effects: Value increases with number of users. More users → more value for each user. Positive feedback loop (more users attract more users, virtuous cycle). Metcalfe's law: V = n² (value proportional to square of number of users, n). Example: telephone (1 phone = no value, 2 phones = 1 connection, 10 phones = 45 connections, 100 phones = 4,950 connections, value grows exponentially).

Direct network effects: Value directly from other users. Telephone (more users → more people to call). Social media (Facebook, Twitter—more users → more connections, content, interactions). Messaging (WhatsApp, WeChat—more users → more people to message). Communication networks (email, fax—more users → more value).

Indirect network effects: Platform, two-sided market. Buyers and sellers (eBay, Amazon—more buyers attract more sellers, more sellers attract more buyers). Users and developers (iPhone, Android—more users attract more app developers, more apps attract more users). Riders and drivers (Uber, Lyft—more riders attract more drivers, more drivers attract more riders). Cross-side network effects (each side benefits from growth of other side).

Platform economics: Platforms facilitate transactions (connect buyers and sellers, users and developers, riders and drivers). Capture value (take percentage of transaction, subscription fees, advertising). Network effects create platform dominance (winner-take-all markets, first-mover advantage, lock-in, switching costs high). Platform strategies: subsidize one side (free for users, charge developers; low prices for riders, charge drivers), build network effects (critical mass, tipping point), create lock-in (data, relationships, habits—switching costs).

Convergence: Network effects create economic value. Networks are economic assets (more connections → more value, exponential growth). Platforms capture network value (billions of dollars market cap—Facebook, Amazon, Uber). Sociology (networks, connections, relationships) and economics (value, wealth, markets) converge: social networks create economic platforms, network effects create wealth. Build networks = build economic value.

3. Trust/Reciprocity × Economic Efficiency

Trust: Belief others will cooperate, not defect. Reduces uncertainty (know what to expect, can plan, invest). Enables cooperation (prisoner's dilemma—cooperation better than defection if trust, repeated interactions). Reduces transaction costs (trust cheaper than contracts, lawyers, enforcement; handshake vs legal contract). High-trust societies (Denmark, Sweden, Norway, Japan—low corruption, efficient institutions, high GDP). Low-trust societies (high corruption, inefficient institutions, low GDP).

Reciprocity: Give → receive (social norm, "I scratch your back, you scratch mine"). Evolutionary advantage (reciprocal altruism—help others, they help you, long-term benefit). Tit-for-tat strategy (cooperate first, then copy opponent—evolutionarily stable strategy, cooperation evolves). Builds relationships (reciprocity creates bonds, trust, social capital). Economic benefit (give now, receive later—investment in social capital, future opportunities).

Cooperation: Prisoner's dilemma (cooperation better than defection if repeated interactions, trust, reciprocity). Tragedy of the commons (cooperation needed to manage shared resources, trust and norms enable cooperation—Ostrom, Nobel Prize). Collective action (cooperation needed for public goods, social movements, community projects—trust and reciprocity enable collective action).

Economic benefits of trust: High-trust societies → higher GDP, economic growth (Fukuyama "Trust"). Lower transaction costs (trust reduces need for contracts, enforcement, monitoring). More trade, investment (trust enables long-term relationships, complex transactions, innovation). Efficient institutions (trust in government, legal system, reduces corruption, enables rule of law). Trust = economic asset (measurable impact on GDP, growth, prosperity).

Economic benefits of reciprocity: Reciprocal altruism → long-term benefit (give now, receive later, builds social capital). Builds relationships (reciprocity creates trust, bonds, networks). Opportunities (reciprocity opens doors, referrals, partnerships, investments). Reputation (reciprocal people are trusted, liked, attract opportunities). Generosity paradox (give → receive, validated by research—Adam Grant "Give and Take").

Convergence: Trust and reciprocity have economic value. Social norms enable economic transactions (trust reduces transaction costs, reciprocity builds relationships, cooperation enables trade). High-trust societies are wealthier (trust = economic asset, measurable GDP impact). Sociology (trust, reciprocity, cooperation, social norms) and economics (transaction costs, trade, growth, efficiency) converge: social capital is economic capital. Build trust = build economic efficiency.

4. Network Structure × Economic Outcomes

Weak ties (Granovetter): Acquaintances, colleagues (not family, close friends). Bridges between groups (connect different social circles, communities, organizations). Access to diverse information (weak ties provide novel information, strong ties provide redundant information—same social circle). Novel opportunities (weak ties lead to new jobs, investments, partnerships—different from what strong ties provide). Job searches (Granovetter study: 56% of jobs found through weak ties, not strong ties—weak ties bridge structural holes, access diverse networks, novel job opportunities).

Strong ties: Family, close friends (frequent interaction, high trust, emotional support). Bonding (homogeneous groups, similar backgrounds, values). Redundant information (strong ties know same people, same information—echo chamber). Emotional support (strong ties provide help in crisis, emotional needs). Important but different function (strong ties = support, weak ties = opportunities).

Information flow: Weak ties provide new information (bridges between groups, access diverse sources, novel ideas). Strong ties provide redundant information (same social circle, same sources, echo chamber). Weak ties more valuable for information diversity, opportunities (innovation, job searches, entrepreneurship). Strong ties more valuable for emotional support, bonding (crisis, emotional needs, identity).

Economic opportunities: Weak ties lead to jobs (Granovetter: 56% jobs through weak ties). Weak ties lead to entrepreneurship (diverse information, access to resources, investors, customers, partners). Weak ties lead to innovation (combining ideas from different groups, cross-pollination, creativity). Weak ties have economic value (information diversity → opportunities → wealth).

Structural holes (Burt): Gaps in network (groups not connected, no direct ties). Broker (person who bridges structural holes, connects groups, controls information flow). Brokerage advantage (access to diverse information from different groups, arbitrage opportunities—buy low in one group, sell high in another, innovation—combine ideas from different groups, power—control information flow, influence). Brokers earn more (Burt research: brokers promoted faster, earn higher salaries, more entrepreneurial opportunities). Network position matters (central position → more connections, information, opportunities; peripheral position → fewer connections, information, opportunities).

Convergence: Network structure affects economic outcomes. Weak ties have economic value (information diversity, opportunities, jobs, entrepreneurship, innovation). Structural holes create opportunities (brokerage advantage, arbitrage, innovation, power). Network position predicts wealth (central brokers earn more, peripheral actors earn less). Sociology (network structure, weak ties, structural holes, brokerage) and economics (opportunities, wealth, earnings, entrepreneurship) converge: network structure creates economic value. Build diverse networks = build economic opportunities.

Specific Convergence Examples

Job search weak ties: Granovetter study ("Getting a Job", 1974). 56% of jobs found through weak ties (acquaintances, colleagues), not strong ties (family, close friends). Weak ties bridge groups (access diverse information, novel job opportunities). Strong ties redundant information (same social circle, same job opportunities). Weak ties have economic value (lead to jobs, higher salaries, career advancement). Network diversity predicts employment success.

Entrepreneurship social capital: Entrepreneurs with diverse networks more successful (access to information, resources, opportunities). Investors (weak ties to investors, access to capital). Customers (weak ties to different markets, customer segments). Partners (weak ties to complementary skills, resources). Social capital enables entrepreneurship (network diversity predicts venture success, survival, growth). Relationships are economic assets for entrepreneurs.

Platform network effects: Facebook (more users → more value for each user, positive feedback loop). Started with Harvard students (critical mass), expanded to other universities, then general public (network effects, exponential growth). Winner-take-all market (Facebook dominates social media, billions of users, hundreds of billions market cap). Network effects create economic value (social connections → economic platform → wealth). First-mover advantage, lock-in (switching costs high—relationships, data, habits on Facebook).

Trust economic growth: High-trust societies (Denmark, Sweden, Norway—trust levels 60-70% in surveys) → higher GDP per capita ($60,000-$80,000), economic growth (2-3% annually), low corruption (Transparency International rankings top 10). Low-trust societies (many developing countries—trust levels 20-30%) → lower GDP per capita ($5,000-$15,000), lower growth (0-2%), high corruption (rankings bottom 50). Trust has economic value (measurable GDP impact, Fukuyama "Trust"). Social capital (trust) is economic capital (wealth, growth, prosperity).

Divergence and Complementarity

Divergence: Sociology focuses on social (relationships, norms, community, identity). Economics focuses on economic (money, markets, transactions, wealth). Sociology is qualitative (ethnography, interviews, case studies). Economics is quantitative (statistics, models, equations). Sociology is holistic (whole society, culture, structure). Economics is individualistic (rational actors, utility maximization).

Complementarity: Sociology provides social context (networks, trust, norms—how social structures enable economic activity). Economics provides economic mechanisms (transaction costs, network effects, value creation—how social capital creates wealth). Together: complete understanding—social capital (sociology) creates economic value (economics). Social structures enable economic outcomes. Economic incentives shape social structures. Bidirectional causation.

Not contradiction: Social capital not just social—also economic (relationships are assets, networks create value). Economic transactions not just economic—also social (embedded in relationships, trust, norms). Sociology and economics describe same reality (social-economic life), different perspectives. Convergence validates both: social connections create economic value, economic incentives shape social connections. Integrate both for complete understanding.

Practical Applications

1. Build diverse networks: Cultivate weak ties (acquaintances, colleagues, different industries, backgrounds). Attend events, conferences, meetups (expand network beyond close circle). Online networking (LinkedIn, Twitter, professional communities). Diverse network → information diversity → opportunities (jobs, investments, partnerships, innovation). Weak ties have economic value (invest in weak ties, not just strong ties).

2. Bridge structural holes: Identify gaps in your network (groups not connected). Become broker (connect groups, facilitate information flow, introductions). Brokerage advantage (access diverse information, arbitrage opportunities, innovation, power). Brokers earn more (research validated—Burt). Position yourself as connector (build bridges, create value, capture value).

3. Build trust: Be trustworthy (keep promises, be reliable, honest, transparent). Build reputation (trust takes time, consistency, track record). Reciprocate (give before receive, build reciprocity norm). Trust reduces transaction costs (cheaper than contracts, faster deals, long-term relationships). High-trust networks more valuable (enable cooperation, complex transactions, innovation). Invest in trust = invest in economic efficiency.

4. Leverage network effects: If building platform, focus on network effects (get to critical mass, tipping point). Subsidize one side (free for users, charge other side). Build lock-in (data, relationships, habits—increase switching costs). First-mover advantage (network effects create winner-take-all, move fast). Network effects create exponential value (Metcalfe's law V = n²). Build networks = build wealth.

5. Give generously: Reciprocity (give → receive, social norm, long-term benefit). Build social capital (generosity builds relationships, trust, reputation). Opportunities flow (reciprocity opens doors, referrals, partnerships). Generosity paradox (give → receive more, validated research—Adam Grant). Strategic giving (give to build network, not just altruism—enlightened self-interest). Give to receive (invest in social capital, reap economic returns).

Future Research Directions

1. Quantify social capital value: Measure social capital (network size, diversity, strength, trust levels). Measure economic outcomes (income, wealth, employment, entrepreneurship success). Test correlation (does social capital predict economic outcomes?). Quantify effect size (how much does social capital matter? compared to education, skills, capital?). Validate: social capital = economic asset.

2. Network structure and wealth: Map networks (social network analysis, graph theory). Measure network position (centrality, brokerage, structural holes). Test: does network position predict wealth? Do brokers earn more? Do central actors accumulate more wealth? Longitudinal studies (track networks and wealth over time). Optimize network structure for wealth.

3. Trust and economic growth: Cross-country studies (trust levels and GDP, growth rates). Causal analysis (does trust cause growth? or growth cause trust? or both?). Mechanisms (how does trust increase growth? transaction costs, trade, investment, innovation?). Interventions (can we increase trust? education, institutions, policies?). Build high-trust societies for prosperity.

4. Platform economics: Study network effects (how do platforms create value? critical mass, tipping points, lock-in?). Winner-take-all dynamics (why do platforms dominate? first-mover advantage, switching costs?). Platform strategies (subsidize which side? how to build network effects? how to capture value?). Regulation (are platform monopolies good or bad? antitrust, competition policy?). Understand platform economics for digital age.

5. Social capital interventions: Design interventions to build social capital (networking programs, community building, trust-building initiatives). Test effectiveness (do interventions increase social capital? do they increase economic outcomes?). Scale (can social capital interventions work at societal level? policies, institutions?). Cost-benefit (is investing in social capital cost-effective? compared to education, infrastructure?). Build social capital for economic development.

Conclusion

Economics and sociology converge on social capital and network effects. Social capital economic value: social capital definition networks who you know connections relationships trust belief others cooperate norms reciprocity fairness cooperation social resources access information opportunities support Putnam features social organization networks norms social trust facilitate coordination cooperation mutual benefit, types social capital bonding strong ties family close friends emotional support homogeneous groups redundant information bridging weak ties acquaintances colleagues information diversity heterogeneous groups novel opportunities linking vertical ties different status power access resources institutions authorities all three types valuable different functions, economic value facilitates transactions networks connect buyers sellers reduce search costs enable trade reduces transaction costs trust cheaper contracts enforcement social norms reduce need formal institutions information asymmetry networks provide information reduce uncertainty enable better decisions opportunities networks provide access jobs investments partnerships referrals resources trust enables cooperation prisoner's dilemma cooperation better if trust repeated interactions trust enables trade investment innovation, measurement network size number connections larger network more opportunities network diversity different types people diverse network more information opportunities network strength frequency interaction trust level strong ties emotional support weak ties information social capital indices World Values Survey trust levels civic engagement associational membership, convergence social capital economic value relationships assets not just social economic networks create wealth provide opportunities reduce costs enable transactions sociology social capital networks trust economics transaction costs opportunities value converge social connections create economic value invest relationships invest economic assets. Network effects platform economics: network effects value increases number users more users more value each user positive feedback loop more users attract more users virtuous cycle Metcalfe's law V n squared value proportional square number users n example telephone 1 phone no value 2 phones 1 connection 10 phones 45 connections 100 phones 4950 connections value grows exponentially, direct network effects value directly from other users telephone more users more people call social media Facebook Twitter more users more connections content interactions messaging WhatsApp WeChat more users more people message communication networks email fax more users more value, indirect network effects platform two-sided market buyers sellers eBay Amazon more buyers attract more sellers more sellers attract more buyers users developers iPhone Android more users attract more app developers more apps attract more users riders drivers Uber Lyft more riders attract more drivers more drivers attract more riders cross-side network effects each side benefits growth other side, platform economics platforms facilitate transactions connect buyers sellers users developers riders drivers capture value take percentage transaction subscription fees advertising network effects create platform dominance winner-take-all markets first-mover advantage lock-in switching costs high platform strategies subsidize one side free users charge developers low prices riders charge drivers build network effects critical mass tipping point create lock-in data relationships habits switching costs, convergence network effects create economic value networks economic assets more connections more value exponential growth platforms capture network value billions dollars market cap Facebook Amazon Uber sociology networks connections relationships economics value wealth markets converge social networks create economic platforms network effects create wealth build networks build economic value. Trust reciprocity economic efficiency: trust belief others cooperate not defect reduces uncertainty know what expect can plan invest enables cooperation prisoner's dilemma cooperation better defection if trust repeated interactions reduces transaction costs trust cheaper contracts lawyers enforcement handshake vs legal contract high-trust societies Denmark Sweden Norway Japan low corruption efficient institutions high GDP low-trust societies high corruption inefficient institutions low GDP, reciprocity give receive social norm I scratch your back you scratch mine evolutionary advantage reciprocal altruism help others they help you long-term benefit tit-for-tat strategy cooperate first then copy opponent evolutionarily stable strategy cooperation evolves builds relationships reciprocity creates bonds trust social capital economic benefit give now receive later investment social capital future opportunities, cooperation prisoner's dilemma cooperation better defection if repeated interactions trust reciprocity tragedy commons cooperation needed manage shared resources trust norms enable cooperation Ostrom Nobel Prize collective action cooperation needed public goods social movements community projects trust reciprocity enable collective action, economic benefits trust high-trust societies higher GDP economic growth Fukuyama Trust lower transaction costs trust reduces need contracts enforcement monitoring more trade investment trust enables long-term relationships complex transactions innovation efficient institutions trust government legal system reduces corruption enables rule law trust economic asset measurable impact GDP growth prosperity, economic benefits reciprocity reciprocal altruism long-term benefit give now receive later builds social capital builds relationships reciprocity creates trust bonds networks opportunities reciprocity opens doors referrals partnerships investments reputation reciprocal people trusted liked attract opportunities generosity paradox give receive validated research Adam Grant Give and Take, convergence trust reciprocity economic value social norms enable economic transactions trust reduces transaction costs reciprocity builds relationships cooperation enables trade high-trust societies wealthier trust economic asset measurable GDP impact sociology trust reciprocity cooperation social norms economics transaction costs trade growth efficiency converge social capital economic capital build trust build economic efficiency. Network structure economic outcomes: weak ties Granovetter acquaintances colleagues not family close friends bridges between groups connect different social circles communities organizations access diverse information weak ties provide novel information strong ties provide redundant information same social circle novel opportunities weak ties lead new jobs investments partnerships different strong ties provide job searches Granovetter study 56% jobs found weak ties not strong ties weak ties bridge structural holes access diverse networks novel job opportunities, strong ties family close friends frequent interaction high trust emotional support bonding homogeneous groups similar backgrounds values redundant information strong ties know same people same information echo chamber emotional support strong ties provide help crisis emotional needs important different function strong ties support weak ties opportunities, information flow weak ties provide new information bridges between groups access diverse sources novel ideas strong ties provide redundant information same social circle same sources echo chamber weak ties more valuable information diversity opportunities innovation job searches entrepreneurship strong ties more valuable emotional support bonding crisis emotional needs identity, economic opportunities weak ties lead jobs Granovetter 56% jobs weak ties weak ties lead entrepreneurship diverse information access resources investors customers partners weak ties lead innovation combining ideas different groups cross-pollination creativity weak ties economic value information diversity opportunities wealth, structural holes Burt gaps network groups not connected no direct ties broker person bridges structural holes connects groups controls information flow brokerage advantage access diverse information different groups arbitrage opportunities buy low one group sell high another innovation combine ideas different groups power control information flow influence brokers earn more Burt research brokers promoted faster earn higher salaries more entrepreneurial opportunities network position matters central position more connections information opportunities peripheral position fewer connections information opportunities, convergence network structure affects economic outcomes weak ties economic value information diversity opportunities jobs entrepreneurship innovation structural holes create opportunities brokerage advantage arbitrage innovation power network position predicts wealth central brokers earn more peripheral actors earn less sociology network structure weak ties structural holes brokerage economics opportunities wealth earnings entrepreneurship converge network structure creates economic value build diverse networks build economic opportunities. Examples: job search weak ties (Granovetter study Getting Job 1974 56% jobs found weak ties acquaintances colleagues not strong ties family close friends weak ties bridge groups access diverse information novel job opportunities strong ties redundant information same social circle same job opportunities weak ties economic value lead jobs higher salaries career advancement network diversity predicts employment success), entrepreneurship social capital (entrepreneurs diverse networks more successful access information resources opportunities investors weak ties investors access capital customers weak ties different markets customer segments partners weak ties complementary skills resources social capital enables entrepreneurship network diversity predicts venture success survival growth relationships economic assets entrepreneurs), platform network effects (Facebook more users more value each user positive feedback loop started Harvard students critical mass expanded other universities general public network effects exponential growth winner-take-all market Facebook dominates social media billions users hundreds billions market cap network effects create economic value social connections economic platform wealth first-mover advantage lock-in switching costs high relationships data habits Facebook), trust economic growth (high-trust societies Denmark Sweden Norway trust levels 60-70% surveys higher GDP per capita 60000-80000 dollars economic growth 2-3% annually low corruption Transparency International rankings top 10 low-trust societies many developing countries trust levels 20-30% lower GDP per capita 5000-15000 dollars lower growth 0-2% high corruption rankings bottom 50 trust economic value measurable GDP impact Fukuyama Trust social capital trust economic capital wealth growth prosperity). Applications: build diverse networks cultivate weak ties acquaintances colleagues different industries backgrounds attend events conferences meetups expand network beyond close circle online networking LinkedIn Twitter professional communities diverse network information diversity opportunities jobs investments partnerships innovation weak ties economic value invest weak ties not just strong ties, bridge structural holes identify gaps network groups not connected become broker connect groups facilitate information flow introductions brokerage advantage access diverse information arbitrage opportunities innovation power brokers earn more research validated Burt position yourself connector build bridges create value capture value, build trust be trustworthy keep promises reliable honest transparent build reputation trust takes time consistency track record reciprocate give before receive build reciprocity norm trust reduces transaction costs cheaper contracts faster deals long-term relationships high-trust networks more valuable enable cooperation complex transactions innovation invest trust invest economic efficiency, leverage network effects if building platform focus network effects get critical mass tipping point subsidize one side free users charge other side build lock-in data relationships habits increase switching costs first-mover advantage network effects create winner-take-all move fast network effects create exponential value Metcalfe's law V n squared build networks build wealth, give generously reciprocity give receive social norm long-term benefit build social capital generosity builds relationships trust reputation opportunities flow reciprocity opens doors referrals partnerships generosity paradox give receive more validated research Adam Grant strategic giving give build network not just altruism enlightened self-interest give receive invest social capital reap economic returns. Social capital economic value relationships assets networks create wealth network effects platform economics trust reciprocity cooperation enable economic transactions network structure affects economic outcomes sociology economics converge social connections create economic value.