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Unformatted text preview: Journal of Institutional Economics (2006), 2: 3, 365–383 Printed in the United Kingdom C ° The JOIE Foundation 2006 doi:10.1017/S1744137406000452 Fragment Simmel’s Treatise on the Triad (1908) BART NOOTEBOOM ∗ Tilburg University Editorial introduction In the literature on firms and organizations, in economics, sociology, and business studies, there has been an increasing awareness that firms need others, outside the firm, in order to function, and particularly in order to innovate. This has led to the proliferation of studies on subjects such as outsourcing, inter-firm alliances, and networks of firms. Still, though, most of these studies focus on dyads of firms (i.e., strategic interaction of firms). Even in network studies, networks were seen mostly as aggregates of dyads. In contrast, in network analysis in sociology there has been, for some time, attention to roles and effects of third parties and of triads. In particular, the work of Ronald Burt (e.g. Burt, 1992) noted the importance, especially in the context of the acquisition of new information, of being a third party in ‘bridging structural holes’ between unconnected nodes or networks, and the opportunities for advantage as a tertius gaudens (laughing third) in playing agents off against each other. While in network analysis this attention to triads is relatively new, it has, in fact, a long history, going back, in particular, to the work of the sociologist Georg Simmel. A recent publication that acknowledges this is Krackhardt (1999). Georg Simmel was born in Berlin in 1858 and died in 1918. He studied history and philosophy and lectured on logic, philosophy, ethics, psychology, and sociology. To the extent that Simmel is known among economists, it is probably mostly from his Philosophy of Money . However, prior to Burt, Simmel analysed the tertius gaudens , with great Machiavellian elaboration of stratagems of divide et impera (divide and rule). In contrast with Burt, he analysed not only its opportunities but also its limits, where it breaks down, and where advantage switches to disadvantage, as recognized and elaborated by Krackhardt (1999). Also, Simmel analysed how, in contrast with the tertius gaudens, benevolent third parties can facilitate collaboration between others, as intermediaries and arbitrators, and the limits and problems associated with that. * Correspondence to : Bart Nooteboom, Email: [email protected] 365 366 BART NOOTEBOOM In contrast with Burt and later researchers, Simmel did not analyse the implications of triad structures for learning and innovation. Nevertheless, his work retains a high degree of relevance. In his analyses, Simmel used examples and illustrations from markets, from the life of families and friends, and, most extensively, from politics. The latter especially illustrate the relevance of his analysis for institutional analysis....
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