The Many Gifts of Status: How Attending to Audience Reactions Drives the Use of Status

The majority of extant studies involving status argue that status enters into choice and evaluation because people personally believe that status serves as a signal of quality. However, this mechanism seems less plausible in cases when consensus on the meaning of quality is lacking. To understand how and why status often nonetheless enters into evaluation in those cases, this paper contributes to a growing body of work that proposes that individuals and organizations are particularly likely to base their choices and evaluations on status when they are concerned with the reactions of others. We provide an empirical test of this argument by analyzing how the sales gap between prizewinning books and their shortlisted-only peers (as well as a second similar-content control group) changes during the December holidays, when the purchase of books as gifts increases relative to purchases for one’s own personal use. Results show that the sales gap widens with the increased orientation toward gift giving, consistent with our theoretical arguments about how attending to audience reactions drives the use of status. Analyses of two online experiments allow for further clarification of the mechanism behind our findings.

This paper was accepted by Ray Reagans, organizations.