Granovetter's theory of embeddedness

Granovetter's theory of embeddedness suggests that economic activities and individual actions are deeply influenced by their social relationships and networks. Instead of viewing markets as independent and purely rational exchanges, it emphasizes that trust, norms, and connections among people shape economic behavior. Strong ties, like close friends or family, provide trust and cooperation, while weak ties, like acquaintances, help access new opportunities and information. This interconnectedness explains how social context heavily impacts economic decisions, shaping how resources are allocated and how networks foster trust and collaboration in society.