Ronald Burt on Network Gossip: The Social Origins of Reputation

7:30–9:00 pm

Jun.
19

Ronald S. Burt is the Hobart W. Williams Professor of Sociology and Strategy at the University of Chicago Booth School of Business. On June 19, 2015, he delivered a talk at the UChicago Center in Beijing titled “Network Gossip: The Social Origins of Reputation.” Competitive advantage in networks is created by information breadth, timing and arbitrage advantages from bridging structural holes. Benefiting from the advantage, however, depends on having sufficient social standing to be accepted as a network broker (formal authority, informal authority, and especially reputation which most allows new talent to rise up).  The processes by which social standing is allocated provide governance in social networks, making the origins of reputation critical to understanding competitive advantage.  In nonhuman networks, reputation emerges in a well-known way within closed networks distributing trusted information from repeated observation (eBay, Amazon, etc.; bandwidth effect).  In human networks, however, closed networks typically play a more active role in defining reputations.  Closed networks operate as echo chambers in which people share selected stories in casual gossip intended to strengthen connections with one another (echo effect).  Sharing the same opinion again and again makes people feel connected but they become ignorantly certain in their opinions of others — reputations become amplified to persistent positive and negative extremes.  In short, reputations are a byproduct of people building relations with one another, which has implications for network governance and managing reputation.

 

Ronald Burt studies the ways that social networks create competitive advantage in careers, organizations, and markets.

Burt joined the Chicago Booth faculty in 1993. He spent the last several years teaching in the Executive MBA program and in UChicago programs for senior executives. When commenting on the difference in environments at various institutions, he described UChicago as a place where “the risk of new ideas is higher than anywhere else because you are continually exposed to confrontation and contradiction between ideas. Most other places protect you from that.”

Originally a pre-med major, Burt wanted to better explain people’s behavior. He went into physiological psychology, then social psychology, finally finishing his doctorate under mathematical sociologist James Coleman here at Chicago. He earned a bachelor’s degree in social and behavioral science from Johns Hopkins University in 1971 and a PhD in sociology from the University of Chicago in 1977. He sought a better understanding of European business by spending two years as the Shell Professor of Human Resources at INSEAD, and came to better understand practical applications of his research by spending two years as the Vice President of Strategic Learning at Raytheon Company.