Publications
Double-edged Stars: Michelin Stars, Reactivity, and Restaurant Exits in New York City
This article develops a theoretical framework to explicate how third parties, who are not transactionally involved in a given exchange relationship, can promote or impede the creation and capture of value by influencing market actor beliefs and behaviors. I investigate these issues empirically through an abductive mixed-method case study of the Michelin Guide’s entry into New York City. An examination of two decades of the openings and closings of New York City’s elite restaurants indicates that receiving a Michelin star corresponded to an increased likelihood of restaurant exit. Michelin stars appear to have fostered disruptions at recipients’ upstream and downstream interfaces, which inhibited their ability to capture value. This ultimately underscores how value network reactivity to third-party evaluations may lead to unintended consequences for firms.
–
Technology Adoption and Innovation: The Establishment of Airmail and Aviation Innovation in the United States, 1918-1935
with Eunhee Sohn and Robert Seamans
<<Pre-Print PDF Available Here>>
This article explores how technology adoption can shape innovative activity. We study this issue within the historical context of the introduction and expansion of airmail across the United States between 1918 and 1935 using archival material and a novel dataset of early 20th century patents. A joint qualitative and quantitative investigation indicates that local individual and corporate actors applied diverse pools of knowledge and intensified their work with aviation innovations following airmail entry into their county. Moreover, we find evidence that the co-location of aircraft manufacturing and airmail operations was associated with more corporate innovations that facilitated economies of scale and corresponded to increased technological diversification of firms' aviation patent portfolios. Ultimately, this paper deepens our understanding of the antecedents, consequences, and organizational processes that underpin innovation.
–
Rating Systems and Increased Heterogeneity in Firm Performance: Evidence from the New York City Restaurant Industry, 1994-2013
with Jason Greenberg, Gino Cattani, and Joe Porac
<<Pre-Print PDF Available Here>>
We investigate the extent to which the increasing availability of ratings information has affected heterogeneity in firm performance and, if so, what market segments are responsible for these changes. A unique dataset was constructed with restricted-access government revenue data to examine these questions in the context of the New York City restaurant industry between 1994-2013. We find that firms serving tourist and high-price market segments experienced increasing sales discrepancies as a function of ratings differentials when ratings information became more easily accessible with the advent of online ratings platforms. These findings depict how the prevalence of online rating systems have shaped competition and value capture, thus providing insight into determinants of firm performance heterogeneity.
–
Competitive Sensemaking in Value Creation and Capture
with Gino Cattani, Joseph Porac, and Jason Greenberg
<<Pre-Print PDF Available Here>>
We suggest that a systematic socio-cognitive approach to “competitive sensemaking” has been absent from theory and research on competitive strategy. We define competitive sensemaking as the social and cognitive processes that underlie how firms detect, define, and conceptualize their competitive relationships with other firms. Competitive sensemaking is a subset of the more general process of strategic sensemaking, which is the “making plausible sense” of the broad array of stimuli and circumstances that characterize complex market situations. Using the value-based view of value creation and capture as a conceptual base for our arguments, we unpack four cognitive underpinnings of competitive sensemaking: mental time travel, comparability, counterfactual reasoning, and stories. We then show how these four components were differentially involved in shaping competitive sensemaking in four actual market situations. In doing so, we illustrate how competitive sensemaking provides fundamental inputs into the value creation and value capture process. We conclude the paper by drawing out the implications of competitive sensemaking for strategy theory and research.
–
Competition as Sensemaking
with Gino Cattani, Joseph Porac, and Jason Greenberg
<<Pre-Print PDF Available Here>>
Consistent with other recent work (e.g. Arora-Jonsson et al. 2020), we move away from the notion that competition is simply out there, passively waiting to be observed and then recognized as such. Instead, we argue that competition is the ongoing sensemaking process where different actors (e.g. transaction partners, managers, other firms, and even non-contractually involved external audiences) interact and where market boundaries are continuously defined, contested, and redefined. Competition, thus, is socially constructed, and accounts of competition extend from the collective mental models of different actors that weave in and out of the marketplace. Reconsidering fundamental assumptions about competition offers an opportunity to better understand its institutional and organizational foundations, while also recognizing its agentic—and, by extension, strategic—nature. The sensemaking approach, for which we advocate, provides such an orientation.
–
Does Stylistic Similarity to Popular Competitors Affect Consumer Evaluations of Quality? Evidence from Online Movie Evaluations
<<Pre-Print PDF Available Here>>
This work addresses how consumer perceptions of quality may be influenced by the composition of competition. I develop a theoretical framework that explains how consumer evaluations of quality can be negatively impacted by a product's stylistic similarity to popular competitors. These issues are examined empirically using more than 75,000 online consumer evaluations, from the evaluation aggregator Rotten Tomatoes, of 123 feature films released in the United States during 2007. Results suggest that during a movie's opening week, movies that are stylistically similar to the top-performing box office movie are evaluated less favorably. Additional analyses indicate that this negative effect may persist in later periods due to social conformity pressures, and that there is reduced demand for those movies that are stylistically similar to the top box office performer. This article contributes to the broader literature in strategic management by depicting how stylistic features of competitors can affect consumer behaviour and perceptions of quality in markets. This work also suggests managerial implications for entry-timing decisions and positioning choices.
–
Seeing Value through the Eyes of Others: Perceptions of Value and Rebidding in Online Auctions
<<Pre-Print PDF Available Here>>
This paper addresses social interatcion and the formation of value beliefs in markets. It empirically examines value construction by analyzing rebidding behavior in online auctions, wherein individuals reassess the maximum price they would pay for a given product. Statistical analyses of more than 10,000 auctions containing more than 55,000 individual bids on the auction website eBay suggest that rebidding is positively associated with a lack of auction- internal price information and bidder inexperience. Analyses also suggest that engaging in rebidding is positively associated with an individual winning an auction. This work, therefore, helps to provide a deeper understanding about valuation, price formation, and the organization of markets. This work contributes to domains of research related to the construction of value and the emergence, evaluation, and legitimization of new products, services, and ideas.
Working Papers
Concept and Creativity: Proof-of-Concept and Aviation Innovation in the United States, 1894-1913
with Eunhee Sohn and Robert Seamans
R&R Research Policy
This paper conceptualizes proof-of-concept demonstration as the public display of a new functioning technology and investigates its effect on technological progress and industry emergence within the context of aviation in the United States between 1894-1913. The first successful demonstration of powered flight marked a watershed moment in the development of aviation and provided a proof-of-concept that would dramatically change the trajectory and locus of flight-focused innovation. Our historical case study of these dynamics indicates that there was a dramatic increase in the amount of aviation patenting following successful public demonstrations of the airplane. We find that the geographic locus of innovation in the United States changed dramatically in the decade starting in 1908, with aviation patenting increasing most significantly in areas with high pre-existing levels of innovative activity and that these spillover effects were strongest in areas that were geographically close to the demonstration site. Evidence suggests that proof-of-concept demonstration was a key trigger in stimulating aviation innovations during this pre-commercialization era of the industry’s emergence, and we observe that patenting continued to be largely driven by individual inventors rather than corporate actors. We find that inventors placed greater focus on new elements of airplanes related to the proof-of-concept design. We also find that inventors increased their patenting of alternative types of flying devices that were conceptually and technologically distinct from the demonstrated fixed-wing airplane indicating positive innovation spillovers in conceptually similar technological domains. Ultimately, this work links micro- and macro-levels of analysis and perspectives to provide a comprehensive account of the creative processes that underpin technological advance, and it contributes to our understanding of the incubation stage of industry emergence around new technologies.
–
Interorganizational Personnel Mobility Ties and Institutional Change: How Parisian Haute Couture Fashion Transformed into Prêt-à-Porter, 1945-1973
with Frédéric Godart And Yue Zhao
In Progress
Despite recent research highlighting how personnel mobility can impact firm outcomes such as innovation and survival, relatively little work has examined the relationship between the movements of employees between firms and broader processes of institutional changes. We address these issues by analyzing the relationship between the movements of key employees and the institutionalization of ready-to-wear in French fashion between 1945 and 1973. Originating in the United States, this change displaced traditional custom-made haute couture as the most significant activity in French fashion and was later recast as prêt-à-porter (ready-to-wear), a quintessentially French phenomenon. By making a distinction between an organization’s outward ties (i.e., when employees go from a focal organization to other organizations) and their inward ties (i.e., when employees come from outside organizations to a focal organization), our results suggest that institutional change is more quickly embraced by organizations with an outward orientation, while organizations with high levels of inward connections are less likely to embrace institutional change. This paper, therefore, has implications for understanding the relationship between interorganizational personnel mobility ties and institutional changes, especially with respect to creative industries and other areas rich with strategic opportunities for entrepreneurship and novel innovation.
–
Evaluation, Demand, and Quality Certifications: Evidence from a Regression Discontinuity Design
In Progress- RECENTLY presented at SMS 2019 annual Conference
While long held views across diverse literatures stipulate that high status leads to more favorable evaluations of quality, recent research shows that status can actually negatively impact evaluation. In order to better understand these seemingly contradictory findings and systematically investigate consequences of status on evaluation, I develop a theoretical framework that incorporates both indirect market-level and direct socio-cognitive effects of status on evaluations in markets. I test hypotheses derived from this theoretical framework using a nonparametric regression discontinuity design in order to identify a causal effect of status on evaluations. Using data from the evaluation aggregator Rotten Tomatoes, I present statistical analyses providing evidence that status-based motivations attract marginal consumers causing a greater quantity of evaluations for high status offerings. The injection of marginal consumers into the market brings evaluators with more diverse tastes; the overall effect on evaluation, however, can be positive or negative depending on the strength of the positive socio-cognitive effect of status. As a result, status causes early period evaluations to be more favorable overall since the socio-cognitive effect of status most strongly influences the perceptions of early consumers. On the other hand, late period evaluations of high status offerings are relatively less favorable. This work, therefore, highlights that deepening our understanding of evaluation necessitates considering both market-level activities and the socio-cognitive forces that underpin markets.
