on theXoor of the Chicago stock exchange was among theWrst to call attention to
social networks underpinning market exchange. He demonstrated that even in the
archetypical market, actual patterns of buying and selling were shaped by social
relationships. Social networks helped to manage the uncertainty that traders
experienced in the stock market.
Drawing on Polanyi’s description of the social embeddedness of markets,
Granovetter ( 1985 ) provided a seminal statement of the network approach to
markets. Much like Powell’s argument that network organizations were diVerent
from either markets or hierarchies, Granovetter argued that many economic
transactions were shaped by social relationships that build on norms of trust and
reciprocity. His statement spawned serious research on the way in which embedd-
edness shaped economic decision-making and cooperation. Notable studies
include Brian Uzzi’s several studies of the banking, garment, and law industries
and Mizruchi and Stearns’ ( 2001 ) study of bank decision-making.
Another well-developed line of economic sociology research examines inter-
locking corporate boards. This work treats the overlapping memberships of boards
of directors as a social network that connects otherwise independent Wrms
together. Notable studies include Mizruchi’s ( 1992 ) analysis of interlocking direct-
orates to explain political campaign contributions and Davis’s ( 1991 ) analysis of
the diVusion of managerial strategies (the ‘‘poison pill’’) through interlocking
directorates.
A range of other research has described the structure and dynamics of markets in
network terms. Important exemplars include Powell, Koput, and Smith-Doerr’s
( 1996 ) analysis of knowledge creation in the biotech industry in terms of interWrm
networks, Padgett’s ( 2001 ) study of networks underpinning the emergence of
modern banking in Renaissance Florence, and Stark and Bruzst’s ( 1998 ) description
of the evolution of post-Communist East European markets in network terms.
Political scientists Anno Saxenian ( 1996 ) and Richard Locke ( 1994 ) have also used
network ideas to describe regional economies and the logic of state intervention in
these economies.
7 Political Mobilization and Social
Movements
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The network concept has also had signiWcant impact in the study of political
mobilization and social movements. Much of this work has been historical. For
example, Bearman ( 1993 ) analyzed the way in which the Puritan faction in the
network institutionalism 83