ECONOMIC MULTIPLEXITY: THE STRUCTURAL EMBEDDEDNESS OF COOPERATION IN MULTIPLE RELATIONS OF INTERDEPENDENCE

The structural embeddedness argument (Granovetter, 1985) suggests that action in an economic relation is embedded in a network of other economic and social relations. In this paper, we focus on relations of economic interdependence which are embedded in a larger set of relations between the same parties: a medium-range construct which we term economic multiplexity. It includes, among others, instances of multimarket competition, multiple cooperative alliances, multiple buyer-supplier relations, cooperative ties between product-market competitors, and so on. The paper first outlines the scope of economic multiplexity by reviewing different existing literature streams dealing with multiple relations of interdependence among organizations. The review is followed by a game theoretical development of the consequences of economic multiplexity for interfirm cooperation. General propositions and specific corollaries are derived from this theoretical development. Finally, the paper discusses the implications of this cooperative theory for explaining the evolutionary dynamics of multiplexity among firms.