Cognitive Economy and Product Categorization
Journal
Organization Science
ISSN
1047-7039
ISSN-Digital
1526-5455
Type
journal article
Date Issued
2024-02-22
Author(s)
Abstract
In mediated markets, the categorization of products by mediators is critical to efficient interaction between producers and consumers. As organizational research tends to focus on the consequences of categorization rather than its antecedents, however, we know relatively little about why mediators assign one category label or another to a product. In this study, we argue that two informational properties of labels, specificity and distinctiveness, determine the outcomes of mediators’ categorization decisions. Our analysis of product categorization decisions made by members of an online music community, 2000–2020, supports this argument. We find that a label’s odds of being assigned to a product increase (a) if this label encodes information that is neither too similar nor too different from that which is encoded by a superordinate label, that is, it has moderate specificity; and (b) if it encodes information that differs as much as possible from that which is encoded by horizontally related labels, that is, it has maximal distinctiveness. These findings persist after controlling for other possible determinants of mediators’ categorization decisions, including producers’ claims to labels, products’ typicality, and mediators’ expertise.
Language
English (United States)
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
INFORMS
Volume
35
Number
5
Start page
1866
End page
1889
Subject(s)
Division(s)