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Polarization affects many forms of social organization. A key issue focuses on which affective relationships are prone to change and how their change relates to performance. In this study, we analyze a financial institutional over a two-year period that employed 66 day traders, focusing on links between changes in affective relations and trading performance. Traders’ affective relations were inferred from their IMs (>2 million messages) and trading performance was measured from profit and loss statements (>1 million trades). Here, we find that triads of relationships, the building blocks of larger social structures, have a propensity towards affective balance, but one unbalanced configuration resists change. Further, balance is positively related to performance. Traders with balanced networks have the “hot hand”, showing streaks of high performance. Research implications focus on how changes in polarization relate to performance and polarized states can depolarize.

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The evaluation and selection of novel projects lies at the heart of scientific and technological innovation, and yet there are persistent concerns about bias, such as conservatism. This paper investigates the role that the format of evaluation, specifically information sharing among expert evaluators, plays in generating conservative decisions. We executed two field experiments in two separate grant-funding opportunities at a leading research university, mobilizing 369 evaluators from seven universities to evaluate 97 projects, resulting in 761 proposal-evaluation pairs and more than $250,000 in awards. We exogenously varied the relative valence (positive and negative) of others’ scores and measured how exposures to higher and lower scores affect the focal evaluator’s propensity to change their initial score. We found causal evidence of a negativity bias, where evaluators lower their scores by more points after seeing scores more critical than their own rather than raise them after seeing more favorable scores. Qualitative coding of the evaluators’ justifications for score changes reveals that exposures to lower scores were associated with greater attention to uncovering weaknesses, whereas exposures to neutral or higher scores were associated with increased emphasis on nonevaluation criteria, such as confidence in one’s judgment. The greater power of negative information suggests that information sharing among expert evaluators can lead to more conservative allocation decisions that favor protecting against failure rather than maximizing success. This paper was accepted by Alfonso Gambardella, business strategy.