This study attempts to fill the gap in our understanding of the differences between socially embedded and arm's-length transactions by examining the micro-processes of negotiations--in particular, the dynamic creation of a shared logic of exchange--as a way of thinking about the micro-processes of definition, interpretation, and interaction that take place in a negotiation.
The presence and nature of the social ties between the negotiating parties affects their expectations and preferences about outcomes, eases coordination of a shared logic, and determines the normative constraints operating within the interaction.
We investigated the dynamics of improvisation and the creation of a shared logic of exchange and examined ways in which these form a critical link between social ties and the outcomes of economic transactions.
In qualitative analyses of the transcripts, we studied the process of coming to a shared logic of exchange and looked for ways in which the shared logic was affected by social embeddedness.
This excerpt gives a clear flavor of the shared logic in haggling improvisations (#305):
Because these observations do not match our original conceptualization of a shared logic of exchange, we investigate them in detail below.
Because we conceive of improvisations as dynamic, creative acts, we were interested in how the initiation stage (Holmes, 1992) shaped the negotiation that ensued and how transitions subsequent to this stage eased or hindered coordination of a shared logic.
To explore how negotiating parties come to share a logic of exchange, and to check how social embeddedness affects coordination of a shared logic, we looked for incongruence between the initiation stage and the full improvisation.
Friends are more adept than strangers at coordinating a shared logic from the very onset of the interaction.
The evolution of a shared logic of exchange in economic transactions is strongly influenced by social ties.