Drawing on existing theories of social exchange as well as self-categorization theory, we consider how two forms of direct exchange influence whether structurally disadvantaged actors choose to stay in the micro-structures that disadvantage them. We posit that (1) the exit opportunity is more likely to result in disadvantaged actors coming to view their network as a group if there has been a history of reciprocal, as opposed to negotiated, exchange and (2) this psychological group formation should account for disadvantaged actors disproportionately choosing to remain in reciprocal exchange networks. We also consider whether the information actors have about the alternative network affects this choice. Findings from two laboratory experiments generally support our argument that for disadvantaged actors, psychological group formation mediates the relationship between exchange form and staying in networks.
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