Hostname: page-component-586b7cd67f-r5fsc Total loading time: 0 Render date: 2024-11-26T05:03:28.038Z Has data issue: false hasContentIssue false
  • English
  • Français

Networks, Institutions, and Uncertainty: Information Exchange in Early-Modern Markets

Published online by Cambridge University Press:  28 September 2018

Emily Erikson  and
Sampsa Samila
Emily Erikson*
Affiliation:
Associate Professor, Yale University, Department of Sociology, 493 College St., New Haven, CT, 06520.
Sampsa Samila*
Affiliation:
Assistant Professor, IESE Business School, Av Pearson 21, 080034 Barcelona, Spain.
*
E-mail: [email protected]
E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

We analyze patterns of informal information exchange by the English East India Company’s captains to assess the role of relational and institutional governance systems and uncertainty in encouraging information exchange. Using archival data from the emerging early-modern global trade network, we show that uncertainty drove information exchange. Relational-based contract enforcement mechanisms such as small group exchange were largely absent, and increasing institutional strength was associated with decreasing rates of information exchange. The results suggest that opportunity and demand were more important determinants of information exchange than the emergence of formal and informal governance systems.

Type
Research Article
Information
The Journal of Economic History , Volume 78 , Issue 4 , December 2018 , pp. 1034 - 1067
Copyright
© 2018 The Economic History Association. All rights reserved. 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

The authors would like to thank John Campbell, Damon Centola, David Krackhardt, Richard Lachmann, James Lincoln, Adam Slez, Mattias Smangs, and participants of the Networks and Governance Conference at National University of Singapore Business School and the Annenberg School of Communication’s Network Dynamics Group as well as the editor and the anonymous reviewers for insightful comments and feedback. We acknowledge the financial support of the Centre for Law and Business at the National University of Singapore.

References

Adams, Julia. “Principals and Agents, Colonialists and Company Men: The Decay of Colonial Control in the Dutch East Indies.” American Sociological Review 61, no. 1 (1996): 12–28.Google Scholar
Arrow, Kenneth “Economic Welfare and the Allocation of Resources for Invention.” In The Rate and Direction of Inventive Activity: Economic and Social Factors, 609–626. Princeton, NJ: Princeton University Press, 1962.Google Scholar
Bearman, Peter “Generalized Exchange.” American Journal of Sociology 102, no. 5 (1997): 1383–1415.Google Scholar
Bernstein, Lisa “Beyond Relational Contracts: Social Capital and Network Governance in Procurement Contracts.” Journal of Legal Analysis 7, no. 2 (2015): 561–621.Google Scholar
Bogart, Dan “Policy Uncertainty and Investment: Evidence.” Unpublished Manuscript, 2016. http://www.socsci.uci.edu/~dbogart/eic_shipping_mar272016web.pdf (accessed 26 August 2018).Google Scholar
Bowen, H. V. The Business of Empire: The East India Company and Imperial Britain, 1756–1833. Cambridge, UK: Cambridge University Press, 2005.Google Scholar
Buckeridge, Nicholas Journal and Letter Book of Nicholas Buckeridge, 1651–1654, edited by John R. Jenson. Minneapolis: University of Minnesota Press, 1973.Google Scholar
Carlos, Ann M. “Principal-Agent Problems in Early Trading Companies: A Tale of Two Firms.” American Economic Review 82, no. 2 (1992): 140–145.Google Scholar
Carlos, Ann M. “Bonding and the Agency Problem: Evidence from the Royal African Company, 1672–1691.” Explorations in Economic History 31, no. 3 (1994): 313–335.Google Scholar
Carlos, Ann M., and Hejeebu, Santhi “The Timing and Quality of Information: The Case of the Long-Distance Trading Companies, 1650–1750.” In Information Flows: New Approaches in the Historical Study of Business Information, edited by Jari Ojala and John McCusker, 139–168. Helsinki: Studia Historica, 2007.Google Scholar
Carlos, Ann M., and Nicholas, Stephen “Agency Problems in Early Chartered Companies: The Case of the Hudson’s Bay Company.” Journal of Economic History 50, no. 4 (1990): 853–875.Google Scholar
Carlos, Ann M., and Nicholas, Stephen “Managing the Manager: An Application of the Principal Agent Model to the Hudson’s Bay Company.” Oxford Economic Papers 45, no. 2 (1993): 243–256.Google Scholar
Cartwright, Charles An Abstract of the Orders and Regulations of the Honourable Court of Directors, and of Other Documents. London, s.n., 1788?.Google Scholar
Chaudhuri, K. N. The Trading World of Asia and the English East India Company: 1660–1760. Cambridge, UK: Cambridge University Press, 1978.Google Scholar
Coase, R. H. “The Problem of Social Cost.” Journal of Law & Economics 3 (1960): 1–44.Google Scholar
Cotton, Evan East Indiamen: The East India Company’s Maritime Service. London: The Batchworth Press, 1949.Google Scholar
DiMaggio, Paul, Louch, Hugh “Socially Embedded Consumer Transactions: For What Kinds of Purchases Do People Most Often Use Networks?” American Sociological Review 63, no. 5 (1998): 619–637.Google Scholar
Dixit, A. K. Lawlessness and Economics: Alternative Modes of Governance. Princeton, NJ and Oxford: Princeton University Press, 2004.Google Scholar
Erikson, Emily Between Monopoly and Free Trade: The English East India Company, 1600–1757. Princeton, NJ: Princeton University Press, 2014.Google Scholar
Erikson, Emily, Samila, Sampsa “Social Networks and Port Traffic in Early-Modern Overseas Trade.” Social Science History 39, no. 2 (2015a): 151–173.Google Scholar
Erikson, Emily, Samila, Sampsa “Colonial Institutions and Trade Patterns.” Political Power and Social Theory 29 (2015b): 95–122.Google Scholar
Farrington, Anthony Catalogue of East India Company Ships’ Journals and Logs, 1600–1834. London: British Library, 1999a.Google Scholar
Farrington, Anthony A Biographical Index of East India Company Maritime Service Officers: 1600–1834. London: British Library, 1999b.Google Scholar
Feld, Scott L. “The Focused Organization of Social Ties.” American Journal of Sociology 86, no. 5 (1981): 1015–1035.Google Scholar
Furber, Holden “Asia and the West as Partners Before ‘Empire’ and After.” Journal of Asian Studies 28, no. 4 (1969): 711–721.Google Scholar
Gellner, Ernest “Trust, Cohesion, and the Social Order.” In Trust: Making and Breaking Cooperative Relations, edited by Diego Gambetta, 142–157. Oxford, UK: Basil Blackwell, 1988.Google Scholar
Greif, Avner Institutions and the Path to the Modern Economy: Lessons from Medieval Trade. Cambridge, UK: Cambridge University Press, 2006.Google Scholar
Hillmann, Henning, Aven, Brandy L. “Fragmented Networks and Entrepreneurship in Late Imperial Russia.” American Journal of Sociology 117, no. 2 (2011): 484–538.Google Scholar
Holland, Paul, Leinhardt, Samuel “Local Structure in Social Networks.” Sociological Methodology 7 (1976): 1–45.Google Scholar
Ingram, Paul, Lifschitz, Arik “Kinship in the Shadow of the Corporation: The Interbuilder Network in Clyde River Shipbuilding, 1711–1990.” American Sociological Review 71, no. 2 (2006): 334–352.Google Scholar
Kling, Blair B., Pearson, M. N. Furber, Holden The Age of Partnership: Europeans in Asia before Dominion. Honolulu: University of Hawaii Press, 1979.Google Scholar
Landa, Janet T. “A Theory of the Ethnically Homogeneous Middleman Group: An Institutional Alternative to Contract Law.” Journal of Legal Studies 10, no. 2 (1981): 349–362.Google Scholar
Levy, Jack S. “Analytic Problems in the Identification of Wars.” International Interactions 14, no. 2 (1988): 181–186.Google Scholar
Levy, Jack S. Great Power Wars, 1495–1815 [Data set]. Ann Arbor, MI: Inter-university Consortium for Political and Social Research, 1994. Available at https://doi.org/10.3886/ICPSR09955.v1.Google Scholar
Macy, Michael W., and Skvoretz, John “The Evolution of Trust and Cooperation between Strangers: A Computational Model.” American Sociological Review 63, no. 5 (1998): 638–660.Google Scholar
Marshall, Peter James Problems of Empire: Britain and India 1757–1813. London: Allen and Unwin, 1968.Google Scholar
McFadden, Daniel “The Measurement of Urban Travel Demand.” Journal of Public Economics 3, no. 4 (1974): 303–328.Google Scholar
Milburn, William Oriental Commerce. London: Black, Parry, & Co, 1813.Google Scholar
Mizruchi, Mark S., and Stearns, Linda Brewster “Getting Deals Done: The Use of Social Networks in Bank Decision-Making.” American Sociological Review 66, no. 5 (2001): 647–671.Google Scholar
Molm, Linda D., Takahashi, Nobuyuki, Peterson, Gretchen “Risk and Trust in Social Exchange: An Experimental Test of a Classical Proposition.” American Journal of Sociology 105, no. 5 (2000): 1396–1427.Google Scholar
North, Douglass C. “Institutions.” Journal of Economic Perspectives 5, no. 1 (1991): 97–112.Google Scholar
Norton, Matthew “Principal Agent Relations and the Decline of the Royal African Company.” Political Power and Social Theory 29 (2015): 45–76.Google Scholar
Opper, Sonja, Nee, Victor “Network Effects, Cooperation and Entrepreneurial Innovation in China.” Asian Business & Management 14, no. 4 (2015): 283–302.Google Scholar
Podolny, Joel M. “Market Uncertainty and the Social Character of Economic Exchange.” Administrative Science Quarterly 39, no. 3 (1994): 458–483.Google Scholar
Reagans, Ray, McEvily, Bill “Network Structure and Knowledge Transfer: The Effects of Cohesion and Range.” Administrative Science Quarterly 48, no. 2 (2003): 240–267.Google Scholar
Saint-Charles, Johanne, Mongeau, Pierre “Different Relationships for Coping with Ambiguity and Uncertainty in Organizations.” Social Networks 31, no. 1 (2009): 33–39.Google Scholar
Sood, Gagan “‘Correspondence Is Equal to Half a Meeting’: The Composition and Comprehension of Letters in Eighteenth-Century Islamic Eurasia.” Journal of the Economic and Social History of the Orient 50, no. 2 (2007): 172–211.Google Scholar
Sutton, Jean The East India Company’s Maritime Service, 1746–1834: Masters of the Eastern Seas. Suffolk, UK: Boydell Press, 2010.Google Scholar
Watts, Duncan J., and Dodds, Peter Sheridan “Influentials, Networks, and Public Opinion Formation.” Journal of Consumer Research 34, no. 4 (2007): 441–458.Google Scholar
Watts, Duncan J., and Strogatz, Steve Collective Dynamics of Small-World Networks . Nature 393, no. 6884 (1998): 440–442.Google Scholar
Williamson, Oliver E. “Transaction-Cost Economics: The Governance of Contractual Relations.” Journal of Law & Economics 22, no. 2 (1979): 233–261.Google Scholar
Williamson, Oliver E. The Economic Institutions of Capitalism. New York, NY: Free Press, 1998.Google Scholar
Withers, Charles WJ. “Geography, Science and National Identity in Early Modern Britain: The Case of Scotland and the Work of Sir Robert Sibbald (1641–1722).” Annals of Science 53, no. 1 (1996): 29–73.Google Scholar
Yamagishi, Toshio, Yamagishi, Midori “Trust and Commitment in the United States and Japan.” Motivation and Emotion 18, no. 2 (1994): 129–166.Google Scholar
Zucker, Lynne G. “Production of Trust: Institutional Sources of Economic Structure, 1840–1920.” Research in Organizational Behavior 8 (1986): 53–111.Google Scholar
Supplementary material: File

Erikson and Samila supplementary material

Erikson and Samila supplementary material 1

Download Erikson and Samila supplementary material(File)
File 48.9 KB