Human beings are social creatures who depend on links to others to accomplish many of life's tasks. The networks of relations within which each person is embedded include family, friends, and acquaintances. The embeddedness of human activity in such networks is true not just for primal activities such as child-rearing but also for economic activities such as finding a job (Granovetter, 1974).

Indeed, business organizations themselves are held together not only by formal relations of authority but also by informal links that connect people across departmental and hierarchical boundaries. Starting with the Hawthorne studies (Roethlisberger and Dickson, 1939), researchers have investigated the importance of informal networks for job satisfaction (e.g., Roy, 1954), organizational conflict (e.g., Whyte, 1948), worker output (e.g., Jones, 1990), organizational power (e.g., Brass, 1984), and many other aspects of social and organizational life (see Kilduff and Tsai, 2003, for a review).

Only recently, however, has research attention focused on actors' perceptions of the structure of relations in social settings and on how actors' individual differences may affect the network positions they occupy. These topics – actor perceptions and actor individual differences – provide the inspiration for our book. Actors' perceptions of social networks within which they are embedded affect the decisions they make (see the discussion in Burt, 1982, chapter 5), and these perceptions are subject to considerable bias (Krackhardt, 1987a).