A time to give and a time to receive
role switching and generalized exchange in a financial market
Additional information
Authors
Lomi A.,
Bianchi F.
Type
Journal Article
Year
2021
Language
English
Abstract
We study the effect of generalized exchange as a possible mechanism reproducing the flows of resources among participants in financial markets. In an analysis of on-line trading in a major European interbank market for liquidity, we find that generalized exchange is unlikely to affect sequences of short-term market transactions, but it emerges forcefully in the longer-term. This empirical result is consistent with our predictions that generalized exchange may be understood only with reference to the temporal micro-structure of transactions linking occupants of market roles (“buyers” and “sellers,” in our case). We also find that generalized exchange does not affect larger market transactions in the shorter-term, and is unlikely to emerge in the longer-term. This result is consistent with our prediction that generalized exchange does not operate as a stabilizing mechanism for asymmetric market transactions when they involve higher levels of risk. The results of the study clarify how and when context-specific differences in time and value of transactions trigger (or inhibit) generic network mechanisms in decentralized systems of exchange like, for example, markets.
Keywords
Organizational networks, Interorganizational exchange, Reciprocity, Generalized exchange, Financial markets, Relational event models
Journal
Social networks
Volume
77
Number ( Month )
May
Pages (or article number)
118-128
Diffusion
License
CC BY-NC-ND
Visibility
Public
Status open access
Hybrid
