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Emergence of Stratification in Small Groups

Posted by admin in 2013 - (Comments Off on Emergence of Stratification in Small Groups)

Noah Askin, Matthew S. Bothner, and Wonjae Lee

Stratification within small groups is virtually inevitable. Understanding the precise mechanisms by which it occurs and the nature of its consequences is an important sociological endeavor. Individuals’ pre-existing qualities, as well as advantages emerging from intra-group interactions, affect the flows of respect and deference accruing to each member of a group. Differences in these flows in turn create a hierarchy. In this article, we first discuss foundational research on the causes and consequences of stratification before turning to more current trends. We focus on the ways in which status, the primary determinant of one’s location in a group’s hierarchy, is created and maintained or lost. We discuss the Matthew Effect—a process by which high-status group members receive disproportionate credit for their contributions, and also more easily maintain their status. We also address the circumstances and activities that can curb the Matthew Effect. We then move to current research, which centers on two main concepts: first, we consider peer effects, discussing the various means by which an individual’s closest peers shape his or her status; second, we take a broader perspective by examining small groups as open systems. This section considers how a group’s external environment, including other nearby groups, affects the level and stability of within-group stratification. We emphasize key issues and implications for future research on these topics.

Emerging Trends in the Social and Behavioral Sciences (2015)

Primary Status, Complementary Status, and Organizational Survival in the U.S. Venture Capital Industry

Posted by admin in 2013 - (Comments Off on Primary Status, Complementary Status, and Organizational Survival in the U.S. Venture Capital Industry)

Matthew S. Bothner, Young-Kyu Kim, and Wonjae Lee

We introduce a distinction between two kinds of status and examine their effects on the exit rates of organizations investing in the U.S. venture capital industry. Extending past work on status-based competition, we start with a simple baseline: we describe primary status as a network-related signal of an organization’s quality in a leadership role, capturing primary status as a function of the degree to which an organization leads others that are themselves well regarded as lead-organizations in the context of investment syndicates. Combining Harary’s (1959) image of the elite consultant with Goffman’s (1956) concept of “capacity-esteem,” we then discuss complementary status as an affiliation-based signal of an organization’s quality in a supporting role. We measure complementary status as a function of the extent to which an organization is invited into syndicates by well-regarded lead-organizations—that is, by those possessing high levels of primary status. Findings show that, conditioning on primary status, complementary status reduces the rate at which venture capital organizations exit the industry. Consistent with the premise that these kinds of status correspond to different roles and market identities, we also find that complementary status attenuates (and ultimately reverses) the otherwise favorable effect of primary status on an organization’s life chances. Theoretically and methodologically oriented scope conditions, as well as implications for future research, are discussed.

Social Science Research 52 (2015) 588–601


Matthew S. Bothner, Joel M. Podolny, and Edward Bishop Smith

What is the best way to design tournaments for status, in which individuals labor primarily for the esteem of their peers? What process, in other words, should organizers of status-based contests impose upon those who covet peer recognition? We propose a formal model of status-based competition that contrasts two competing alternatives. The first, following Merton, is the “Matthew Effect,” according to which a tournament’s architect directs slack resources to elite actors and thus widens the distribution of rewards by favoring cumulative advantage. The second is the “Mark Effect,” under which a tournament’s designer instead pushes slack resources to marginal actors and thus tightens the distribution of rewards. Our results suggest that although the Mark Effect is better for the social welfare of most tournaments, the Matthew Effect is preferable in two distinct contexts: in small tournaments where variation in underlying ability translates into acute advantages for the most capable contestants; and in large tournaments whose contestants face constant, rather than rising, marginal costs—a condition we relate to contestants’ perception of their work as intrinsically valuable. Our contributions are twofold: We find, counter to the thrust of Merton’s work, that cumulative advantage is not invariably optimal for the functioning of status contests; and we identify circumstances in which the production of superstars is likely to make contests for status better off in aggregate. Implications for future research on status and management are discussed.

Management Science, 57 (2011): 439-457