Structures of Mediation: A Formal Approach to Brokerage in Transaction Networks

Abstract

The concept of brokerage has gained considerable attention in recent years, but few researchers have attempted to specify what the phenomenon is. In this paper, we develop a theoretical conception of brokerage behavior in social systems characterized by the exchange or flow of resources. Building on the idea that any set of actors can be partitioned in a meaningful way into a set of mutually exclusive subgroups, we show that such a partition generates five formally, analytically, and intuitively distinct brokerage types or roles. We construct quantitative measures of each of these five types for actors in social networks and for whole systems, and show that statistical inference can be used to test whether occupancy of a brokerage position is the product of a random distribution of exchange relations or the product of underlying social structure.