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Making Snowflakes Like Stocks: Stretching, Bending, and Positioning to Make Financial Market Analogies Work in Online Advertising

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  • Vern L. Glaser

    (Alberta School of Business, University of Alberta, Edmonton, Alberta, Canada T6G 2R6)

  • Peer C. Fiss

    (Marshall School of Business, University of Southern California, Los Angeles, California 90089)

  • Mark Thomas Kennedy

    (Department of Management, Imperial College Business School, London SW7 2AZ, United Kingdom)

Abstract

Analogies to financial markets have proven powerful in establishing novel or potentially controversial business concepts, even in contexts that deviate significantly from financial markets. This phenomenon challenges theory that suggests analogies work best when elements from a source and target domain map closely to each other. To develop a theory that explains how organizations make initially imperfect analogies “work,” we use a case study of online advertising exchanges, a market-inspired model for buying and selling online advertising space. We find that as organizations stretch an initially misfitting exchange analogy from financial markets to online advertising, they iteratively bend their activities in superficial, structural, and generative ways to match the analogy and position themselves for advantage in the new space being created. Whereas prior studies emphasize shared cognition about familiar domains as the reason why analogies work, our study offers a dynamic account in which stretching, bending, and positioning combine to not only establish the financial market analogy but also subtly change the understanding of markets.

Suggested Citation

  • Vern L. Glaser & Peer C. Fiss & Mark Thomas Kennedy, 2016. "Making Snowflakes Like Stocks: Stretching, Bending, and Positioning to Make Financial Market Analogies Work in Online Advertising," Organization Science, INFORMS, vol. 27(4), pages 1029-1048, August.
    • Handle: RePEc:inm:ororsc:v:27:y:2016:i:4:p:1029-1048
    DOI: 10.1287/orsc.2016.1069
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    References listed on IDEAS

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