Reciprocity Trumps Zero-Sum

Uncategorized April 30th, 2013
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Humans are intrinsically social and networks permeate every part of our lives, this according to Nicholas Christakis and James Fowler, the authors of the book “Connected”. A network of values in the book “The Gardens of Democracy” below further extends the sociable nature of humans.

You may ask. Are these values utopian? Haven’t you heard about the zero-sum game in traditional finance – where with every winner, there is a loser? Can these values work in the realm of finance, specifically in peer to peer lending?

I say Yes. Assume a bona-fide (“good faith”) establishment for the long haul, it is in their absolute interests to remain trustworthy and cement the bridges they have painstakingly built with their stakeholders in the community. To maintain their social capital in the network, reciprocity serves as an essential baseline.

How can an establishment gain from buy accutane uk having social capital? With social capital, an establishment’s trusted reputation can diffuse more widely across the network, therefore enhancing mindshare and brand equity with her customers. Referral and peer endorsements via word of mouth beat any expensive paid promotion (read interruption). This I learned from marketing guru

Talking further moolah with dollars and cents, an influential study by Brian Uzzi concluded that well-connected firms with good repute had better access to financing and were able to get them at lower costs.[1] Our experiences in the banking field corroborate with that.

Reputable, networked firms keep their promises out of reciprocity. So what’s best for everyone is also best for self. It’s not a zero-sum game here!


[1] B. Uzzi, ‘Embeddedness in the Making of Financial Capital: How Social Relations and Networks Benefit Firms Seeking Financing’ (1999) 64 American Sociological Review, 481-505

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