Navigating uncertainty in networks of social exchange: a relational event study of a community currency system

This article analyzes the structure of socially embedded exchange under uncertainty in the context of a community currency system in Germany. We discuss three relational and path-dependent mechanisms—experience-based trust, networked reputation and public reputation—which serve as navigation practices to mitigate uncertainty. We furthermore associate these mechanisms with observable structures of exchange, namely repeated transactions and reciprocity, transitivity and provider activity, and discuss differences in product-inherent uncertainty as a source of variation in network structure. Based on original observations of more than 4000 transactions over a period of 8 years, we use relational event models to demonstrate that the history of transactions exhibits structure consistent with the three hypothesized mechanisms, with some variation across different types of transactions. This variation is partly in line with differences in product-inherent uncertainty, but we also discuss alternative sources of variation related to organizational and institutional conditions of the exchange system.