Category Signaling and Reputation

Published Online:https://doi.org/10.1287/orsc.2014.0935

We propose that category membership can operate as a collective market signal for quality when low-quality producers face higher costs of gaining membership. The strength of membership as a collective signal increases with the sharpness of the category boundary, that is, contrast. Our empirical study focuses on biodynamic and organic viticulture in Alsace.

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