Institute for Research on Labor and Employment
How reputation transfers across categorical boundaries
- Author(s): Leung, Ming D.
- Ng, Weiyi
- et al.
If categorical boundaries serve to assist audiences in lumping together like organizations and separating different ones, then does an organization’s reputation also remain similarly bounded? We conceptualize reputation as an assessment of an actor’s ability or quality, but in the circumscribed domain of an identified category. We hypothesize that reputation acts differentlydepending both on the relevance and focus (read: distance and spanning) of a marketparticipant’s past experiences. We examine an online market for freelancing services. We find that better reputations benefit those sellers who have more relevant experiences with regard to a focal category. However, for those with poor reputations, this disadvantage is ameliorated as distance from the focal category is increased. For those sellers with better reputations, spanningacts detrimentally on their reputational advantage. Yet for those with poor reputations, spanning decreases their disadvantage vis-à-vis their better reputational alters. We also employ a novelmeasure of categorical distance using a text overlap measure.