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Category Spanning, Distance, and Appeal

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  • Kovacs, Balazs

    (University of Lugano)

  • Hannan, Michael T.

    (Stanford University)

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    Abstract

    A general finding in economic and organizational sociology states that producers and products that span categories lose appeal to audiences. This paper argues that to assess the consequences of category spanning researchers need to take account of the relations among the categories spanned. We reason that the negative consequences of category spanning are more severe when the categories spanned are distant and have high-contrast. Because previous empirical strategies do not incorporate information on category distances, here we introduce novel measures to categorical distance and derive measures for grade-of-membership, category contrast and categorical niche width. Using the proposed measurement approach, we test our theory using data on online restaurant reviews, and find that the results confirm our predictions that organizations that span distant and high-contrast categories get lower evaluations from audiences.

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    Bibliographic Info

    Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 2081.

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    Date of creation: Jul 2011
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    Handle: RePEc:ecl:stabus:2081

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