When Do Market Intermediaries Sanction Categorical Deviation? The Role of Expertise, Identity, and Competition

Boulongne, Romain; Cudennec, Arnaud; Durand, Rodolphe

doi:10.1108/s0733-558x2019000065a009

Cited by 11 publications

(7 citation statements)

References 62 publications

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“…An extensive literature suggests that expert judgment is associated with qualitatively distinct cognitive processes from those of novices. Experts can recognize and rely on a broader array of informational cues and appreciate details and complex patterns even more when making evaluations (Boudreau, Guinan, Lakhani, & Riedl, 2016; Boulongne, Cudennec, & Durand, 2019; Camerer & Johnson, 1991; Johnson, Hassebrock, Duran, & Moller, 1982). Hence, “experts in some domain of knowledge make use of attributes that are ignored by the average person” (Rosch, Mervis, Gray, Johnson, & Boyes‐Braem, 1976, p. 430).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

Start with “Why,” but only if you have to: The strategic framing of novel ideas across different audiences

Falchetti

Cattani

Ferriani

2021

Strategic Management Journal

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Research Summary Building on social psychology research and entrepreneurship work on linguistic framing, we argue that the appreciation of novel ideas varies with the mental construal that members of different audiences use to evaluate them. Specifically, we theorize that the congruency between idea framing and audiences' mental construals depends on audiences' level of expertise in evaluating novel ideas. In four experiments, we found that innovators benefit from deploying framing strategies congruent with audiences' mental construals: novices (e.g., lay people, crowdfunders) appreciate more novel ideas framed in abstract why terms, while experts (e.g., professional investors, innovation managers) novel ideas framed in concrete how terms. Integrating the strategic framing of novel ideas with construal level theory and audience heterogeneity contributes to research on entrepreneurship, innovation, and impression management. Managerial Summary One of the critical challenges that innovators (e.g., entrepreneurs) face is to persuade relevant audiences (e.g., users, crowdfunders, professional investors, and innovation managers) to support their novel ideas. This article integrates various literatures concerned with the evaluation of novelty to examine the impact of different framing strategies on the reception of novel ideas by different audiences. By demonstrating that the framing of a novel business idea affects audience members' evaluation, and that the effectiveness of different frames (why vs. how) varies with the target audiences (novices vs. experts), we offer actionable insights into how innovators can strategically use linguistic framing to increase the likelihood of eliciting favorable evaluations and resource commitment for their ideas.

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Section: Theory and Hypothesesmentioning

confidence: 99%

Start with “Why,” but only if you have to: The strategic framing of novel ideas across different audiences

Falchetti

Cattani

Ferriani

2021

Strategic Management Journal

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“…We respond to the recent call to study how heterogeneity in classification systems and audiences shapes evaluation processes (Durand and Boulongne, 2017; Boulongne, Cudennec, and Durand, 2019). We do so by demonstrating that the granularity of the classification system and investors’ sophistication influence the evaluation of non-accused firms, which drives the interplay of the stigma and competition effects.…”

Section: Discussionmentioning

confidence: 99%

“…In this process, experts leverage extensive domain knowledge and expertise, as in the case of stock market analysts with industry-specific expertise who rely on their product knowledge to evaluate firms’ stocks (Zuckerman, 1999). This enables experts to make finer-grained distinctions and perceive subcategories (Boulongne, Cudennec, and Durand, 2019). Accordingly, compared with less sophisticated investors, more sophisticated investors rely on a more fine-grained market classification to effectively map the competitive landscape and thus identify close competitors that may gain following the accusation against their industry peer.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

When an Industry Peer Is Accused of Financial Misconduct: Stigma versus Competition Effects on Non-accused Firms

Naumovska¹,

Lavie

2021

Administrative Science Quarterly

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Research on misconduct suggests that accusations against industry peers generate negative consequences for non-accused firms (a “stigma effect”). Yet, building on research on competitive dynamics, we infer that such accusations can benefit non-accused firms that compete with these peers (a “competition effect”). To reconcile these opposing perspectives, we posit that the negative stigma effect will increase with greater product market overlap between the non-accused firm and its accused peer, up to a point, beyond which the positive competition effect will counterbalance it. We further conjecture that the competition effect will be relatively more pronounced when the market classification used by investors for assessing the market overlap is more fine-grained. Accordingly, we suggest that more sophisticated investors, who rely on more fine-grained market classifications, increase their shareholdings in non-accused firms to a greater extent than less sophisticated investors as the market overlap between the non-accused firm and the accused peer increases. Using elaborate data on products and investments, we analyze investors’ shareholdings and stock market returns of non-accused firms in the U.S. software industry following accusations of financial misconduct by their industry peers, and we find support for our predictions. Our study elucidates the interplay between stigma and competition following misconduct by industry peers.

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“…We contribute to these studies by arguing that changes in the extent to which audiences have expertise in or familiarity with a category can influence categorical schemas over time, in our case category signaling. Future studies could study the interactions among insider and outsider audiences in more detail, also including the role of gatekeepers in this process (Boulongne, Cudennec, and Durand 2019).…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Signals in the Waves of Surf: Category Development and Signals in Surf Music

Punt

Venrooij

2020

Sociological Perspectives

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The aim of this paper is to investigate to what extent the understanding of market categories changes over time and how this is reflected in the importance of different category signals in periods of category maturation and revival. We test the changing influence of different types of category signals on inclusion rates of surf music compilation albums, which represent the understanding of “surf music” from a market-based perspective. We find that “elaborate” signals to the category label of surf music showed to be important during both the stage of maturity and revival. However, restricted category signals using surf slang actually lost their importance over time. Finally, signaling surf-related locations had no effect in early times, but increased chances of inclusion during a revival. By addressing these changes over time in the importance of category signals, we add to recent studies on mechanisms of categorization during different stages of category development.

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When Do Market Intermediaries Sanction Categorical Deviation? The Role of Expertise, Identity, and Competition

Cited by 11 publications

References 62 publications

Start with “Why,” but only if you have to: The strategic framing of novel ideas across different audiences

Start with “Why,” but only if you have to: The strategic framing of novel ideas across different audiences

When an Industry Peer Is Accused of Financial Misconduct: Stigma versus Competition Effects on Non-accused Firms

Signals in the Waves of Surf: Category Development and Signals in Surf Music

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