Richard Swedberg

"The Structure of Confidence and the Collapse of Lehman Brothers"

On September 15, 2008 Lehman Brothers filed for bankruptcy, something that nearly caused a meltdown of the world’s financial system. A few days later Bernanke made his famous statement that “we may not have an economy on Monday.” In this paper, I study the situation before Lehman went bankrupt and also how this event came to operate as a trigger for the financial panic that occurred in the fall of 2008. Two key ideas inform the analysis. The first comes from Walter Bagehot in Lombard Street (1873) and states that what triggers financial panics are typically hidden losses. The second idea is that confidence plays a key role in finance; and that confidence can be conceptualized as a belief that action can be based on proxy signs, rather than on direct information about the economic situation itself. What characterized the situation before Lehman went down was a general worry that the existing proxy signs (ratings, reported earnings and so on) did not adequately represent the economic situation of various financial institutions. Once Lehman went bankrupt, this worry was transformed into a total disbelief in existing proxy signs - a loss of confidence as well as a withdrawal of confidence

Please click here to link to Richard Swedberg's website.

Please click here to view the paper, "The Structure of Confidence and the Collapse of Lehman Brothers"

Michael Macy

"The Length of Weak Ties"

Granovetter’s theory of “the strength of weak ties” is one of the most-cited social theories in network science and an important precursor for Watts’ and Strogatz’ discovery of small world networks. The “strength” is that information about economic opportunities is more likely to come from socially distant acquaintances than close friends. Until recently, however, the structure and strength of social ties in nationwide social networks has been almost impossible to measure. We test predictions of this theory by combining the most complete record of a national communication network studied to date with data on the socio-economic well-being of communities and the purchasing behavior of individuals. We show for the first time that the diversity of individuals’ ties has a strong positive correlation with the social and economic rank of the community (R2=.78). Moreover, contrary to theoretical predictions, clustered relations were no stronger than ties that bridge between clusters and yet were more effective as conduits of peer influence. We speculate that ties within clusters are mainly friendship-oriented, while those between clusters are mainly task-oriented.

Please click here to link to Michael Macy's website.

Douglas Savitsky

"Plea Bargaining as a Cause of Prison Population Growth
and Stratification"

Plea bargaining is a causal factor in the skyrocketing prison population and in the racial stratification within that population. It is ubiquitous as the primary method of criminal case disposition in the United States. It lowers the transaction cost of criminal prosecutions which combines with political policies favoring large scale incarceration to drive up prison populations. Further, plea bargaining indirectly pits defendants against each other in a multi-player Prisoner’s Dilemma that induces defendants to take worse bargains than they otherwise might. The decrease in transaction cost is larger for cases against poor defendants which correlates to a decrease in transaction costs for prosecuting black defendants. Additionally, a defendant negotiates based upon his subjective views of the criminal justice system and his expectation of conviction. He bases these views on objective reality as well as on social, cultural, and economic factors. This analysis leads African American defendants to bargain with a more pessimistic estimate of bargaining compared to white defendants, resulting in overall worse bargains. To view the paper, please click here

Douglas Savitsky received a Ph.D. in sociology from Cornell University in 2009 and a J.D. from The University of Chicago Law School in 2003. His research is concerned with the application of social science to substantive areas of law. To view CV, please click here

Eiko Ikegami

"Sites for Markets and Sites for Poetry: A Curious Convergence"

This talk discusses a curious aspect of economic history of Japan that concerns the origins of markets. The topic might be of general interest to those who are concerned with history, economy and culture from a long term historical perspective. It will be also a postscript for, "Bonds of Civility: Aesthetic Networks and the Political Origins of Japanese Culture." (Ikegami:Cambridge University Press)

to view CV, please click here

Edward Lawler

"Social Commitments in a Depersonalized World"
to view the paper, click here

Professor Edward Lawler's research interests are group processes, social exchange, power, emotion, and bargaining/negotiation. His current research is on the role of emotions and emotional/affective processes in the development of commitment in social exchange. He has developed and tested a theory of rational cohesion (with Shane Thye and Jeongkoo Yoon) that explains how commitment develops in dyadic exchanges and extended that theory to the network level. He recently developed a general "affect theory of social exchange" that will shape his future research. His main goal is to understand how and when social exchange processes generate micro order and solidarity. For a partial listing of Professor Lawler's publications, please click here

As individuals’ ties to community organizations and the companies they work for weaken, many analysts worry that the fabric of our society is deteriorating. But others counter that new social networks, especially those forming online, create important and possibly even stronger social bonds than those in the past. Professor Lawler examines interpersonal and group ties and proposes a new theory of social commitments, showing that multiple interactions, group activities, and, particularly, emotional attachment, are essential for creating and sustaining alignments between individuals and groups.

Siobhan O'Mahony

"Nexus Work: Managing Integration Work on Creative Projects"

Siobhán O'Mahony studies how communities and new ventures in nascent industries organize and new forms of cooperation that emerge to create shared platforms for innovation. A pervasive objective is to understand how competing interests shape the design of new organizations. An additional focus is to understand how individuals lead and communities organize to achieve collective outcomes when operating outside the confines of traditional authority structures. Her work has been published in Administrative Science Quarterly, Organization Science, Academy of Management Journal, Research Policy, Research in Organizational Behavior, Research in the Sociology of Organizations, Industry and Innovation, the Journal of Management and Governance among other edited volumes. She has presented her research at numerous industry and academic conferences throughout North America and Europe. Assistant Professor O'Mahony serves on the editorial board of Administrative Science Quarterly, is currently a special issue editor for Academy of Management Journal, reviews grants for the European Science Foundation, and is an ad hoc reviewer for several other journals. Before joining the UC Davis Graduate School of Management in the fall 2007, Assistant Professor O'Mahony received her Ph.D. in Management Science and Engineering from Stanford University, an M.P.A from the Cornell Institute of Public Affairs, and a B.S. in Industrial Labor Relations from Cornell University.

Much research shows that brokers are more likely to have good ideas and benefit from them. However, to bring a creative project to fruition, brokers must not just have good ideas, but must elicit and integrate the ideas of others. With an ethnographic study of music producers, we studied how those central to a project integrate the ideas of project contributors without losing individuals¹ engagement in the project. We show the conditions that triggered three types of ambiguity and the relational practices producers used to respond to each type. Our process model complements structural conceptions of brokerage and suggests that, when integration work is required, relational nexus work is more likely than the opportunistic arbitrage often associated with brokerage.

Marion Fourcade

"Cents and Sensibility: Economic Valuation and Conceptions of Nature in France and the United States."

Marion Fourcade (PhD Harvard University) is assistant professor of sociology at the University of California, Berkeley. A comparative sociologist, she is interested primarily in investigating and theorizing about how individuals in different countries think about the world and act in it, where these differences come from, and what their macro-social consequences might be. She has worked comparatively on the formation of knowledge, disciplines and professions; the making of economic policies; the forms of political organization; and international processes and dynamics. Her first book, Economists and Societies (Princeton University Press 2009, just out this month), explores the institutions and cultural forces that have shaped the professional identities, practical activities and disciplinary projects of economists in the United States, Britain, and France in the twentieth century. The place of economic expertise and measurement technologies across cultures is also at the core of her next book project on the roots and consequences of social classifications, tentatively titled Measure for Measure: Social Ontologies of Classification. Professor Fourcade’s work has appeared in numerous professional outlets, such as the American Journal of Sociology, the American Sociological Review, and Theory and Society.

In the paper she will present on April 3rd, Professor Fourcade compares the legal treatment of two large-scale maritime oil spills [the Amoco Cadiz (Brittany (France), 1978) and Exxon Valdez (Alaska, 1989)], investigating in particular how French and American plaintiffs sought to obtain monetary compensation for injuries to the natural environment. She shows that the significant national differences in claims and outcomes may be partly explained by the valuation technologies used by the parties, which in turn are inextricably linked to varying cultural assumptions about the concept of nature, the broader social legitimacy of monetary exchange, and institutional legacies about the prerogatives of different types of scientific experts (economists and others) and political actors in the legal process.

Bruce Carruthers

"The Economy of Promises: Credit Institutions in 19th-century America"

Bruce Carruthers earned a Ph.D.from the University of Chicago in 1991. Areas of interest include historical and comparative sociology, economic sociology, sociology of law and sociology of organizations. Carruthers has written three books, City of Capital: Politics and Markets in the English Financial Revolution (Princeton University, 1996), Rescuing Business: The Making of Corporate Bankruptcy Law in England and the United States (Oxford, 1998), and Economy/Society: Markets, Meanings and Social Structure (Pine Forge Press, 2000). His current research projects are on the evolution of credit decision-making as a problem in the sociology of trust, and worldwide changes in bankruptcy law in the era of a globalized world economy. He has had visiting fellowships at the Russell Sage Foundation and the Radcliffe Institute for Advanced Study, and received a John Simon Guggenheim Fellowship. He is methodologically agnostic, and does not believe that the qualitative/quantitative distinction is worth fighting over. Northwestern is Carruthers' first teaching position.

Sten Nyberg

"Norms of Mediocrity - Tall Poppies and the Law of Jante"

Sten Nyberg is Professor of Economics at Stockholm University and holds a PhD from Stockholm School of Economics. He is currently a member of the Institute for Advanced Study in Princeton. His main research interest includes social norms and economic incentives, public economics and industrial organization. He has published in journals such as Economica, International Journal of Industrial Organization, Journal of the European Economic Association, Journal of Public Economics and Quarterly Journal of Economics. Sten Nyberg has also served as economic expert for the Stockholm City Court in competition law trials, and was subsequently a member of the Swedish Market Court for several years. He is on leave from a position as chief economist for the Swedish Competition Authority.

Mitchel Abolafia

"Fine-Tuning the Signal: Constructing 'Spin' at the Federal Reserve"

Mitchel Abolafia is a professor at the Rockefeller College of Public Affairs and Policy at SUNY Albany. His research interests focus on the application of organization theory to the study of monetary policy, financial markets, and bureaucratic politics. He has written articles on economic competition, hyper-rationality, and market culture. His book, Making Markets (Harvard University Press, 1997), is a comparative study of the trading floor in the bond, stock and futures markets. His current research examines policy making at the Federal Reserve Board.

The Federal Reserve transmits signals to a diverse audience of investors, consumers, and firms in an effort to influence their perceptions and behavior. This paper examines the process through which the Federal Reserve fine-tunes those signals. It identifies two major strategies: transparency and misdirection, as well as the signal enhancement and credibility filtering practices associated with each. The iterative and recursive fine-tuning process is illustrated with examples from verbatim transcripts of meetings of the Federal Open Market Committee, the chief policy making unit of the Federal Reserve.