Not the Usual Suspects: Default Expectations and the Strategic Use of Categories

Abstract

This article seeks to identify the type of producers most likely to deviate from category-based expectations in the pursuit of profit. I describe circumstances under which a category’s core members are, paradoxically, more likely (than its peripheral members) to deviate. This phenomenon reflects market participants’ default expectations about core members and the resulting bias in information-search processes. I offer empirical evidence of Champagne producers getting involved in “buyer’s own brands” (BOB), a behavior that is not directly observed yet deviates considerably from grape suppliers’ category-based expectations. The econometric analysis leverages an exogenous shock that increased the scrutiny of BOB by grape suppliers. I find that before the shock, BOB products were more likely to be supplied by “traditional” houses – which grape suppliers view as core industry members and hence as being above suspicion in that regard. I discuss the implications of these results for prior work in this area as well as the article’s contribution to extant literature.

Citation

Ody-Brasier, A. (2018), "Not the Usual Suspects: Default Expectations and the Strategic Use of Categories", Jones, C. and Maoret, M. (Ed.) Frontiers of Creative Industries: Exploring Structural and Categorical Dynamics (Research in the Sociology of Organizations, Vol. 55), Emerald Publishing Limited, Leeds, pp. 237-270. https://doi.org/10.1108/S0733-558X20180000055009