Structural Balance Emerges and Explains Performance in Risky Decision-Making

TitleStructural Balance Emerges and Explains Performance in Risky Decision-Making
Publication TypeJournal Article
Year of Publication2019
AuthorsAskarisichani O, Ng J, Bullo F, Friedkin NE, Singh AK, Uzzi B
JournalNature Communications
Volume10
Date Published06/2019
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.

URLhttps://www.nature.com/articles/s41467-019-10548-8
DOI10.1038/s41467-019-10548-8
Refereed DesignationRefereed