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Intermediaries, Trust and Efficiency of Communication: A Social Network Perspective

  • Oct 9, 2013
  • Shinto Teramoto +1 more
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Abstract

The emergence of the digital communication technologies such as the Internet have had a tremendous impact to the global economic, social and cultural landscape. The interconnectedness of computers and other digital devices had had significantly reduced the costs of communication and the transfer of information. Such technological development has spurred the rise of actors that facilitate the transfer of data between originators of information to its recipients. This, in turn accelerated the rise of multinational organizations as well as the proliferation of global business models. In fact, most of the social interactions involve intermediaries: online search engines, social network sites to the perplexed chains of distribution of commercial goods. The regulation of intermediary activities has been one of the most heated issues in the global agenda. The Global Financial Crisis that led to a collapse of large financial institutions showed the need for national governments to adjust their fiscal policies. Illegal distribution of the copyrighted content online has been another area in which states strive to find some sort of decent regulatory solution. The dissemination of information through intermediaries has been also brought to the public attention by court decisions in cases concerning Google Books, abuse of dominant position by Microsoft and, most recently, patent saga between Apple and Samsung. Although intermediaries play an important role in furthering the dissemination of information and alleviating information asymmetries, the involvement of intermediaries also could be seen as conferring additional transaction costs. At the same time, intermediaries also could be considered as facilitators of social interface. We start this paper by explaining how social network analysis could contribute to the legal scholarship and briefly discuss some key concepts used by the proponents of this methodology. Further, we argue that networks and (mutual) trust should be viewed as a form of social capital. Having introduced a number of cases previously explored by other social scientists, we submit that the establishment of trust-based relationships facilitates the transfer of values and resources. In the second part of this paper we suggest that further distinction between actual and deemed trust helps explain the creation as well as functioning of social networks and focus on the role of intermediaries in considering how they could contribute to the dissemination of information and economic resources. To do that, we provide to case-studies showing how the role of intermediaries can help build trust between remote actors and facilitate cooperation. These case-studies lead us to a more general observation that trust, as a form of social capital, could also be regarded as a public good.

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