When It Is Good to Be Bad: Rewarding Deviance in Stigmatized Markets

• In Event: 4255 - Section on Economic Sociology Roundtables (1 hour)
  In Refereed Roundtable 60min: 9. Markets and Morality

Abstract

Organizations selling stigmatized products persist despite opposition from hostile audiences. Scholars have explained the viability of these organizations by detailing strategies organizations pursue to decrease public scrutiny and opposition. These explanations foreground how organizations attempt to conceal their stigma from hostile outsiders but rarely describe how these stigma management strategies affect selling products to customers. Yet stigmatized markets persist because consumers purchase stigmatized products, inviting further study into how stigma management strategies affect organizational performance. In this paper, I show how hiding stigma can hurt organizational performance by delegitimating products in the eyes of customers. Using deep learning to analyze product descriptions advertised by retailers in Washington State’s recreational cannabis market, I find that that hid their products’ stigmatized features performed worse across all contexts than organizations that did not. However, organizations that highlighted their products’ stigmatized features performed better than those that did not but only in areas where stigma was strongest. Together, these findings suggest that stigma could be an asset, not a liability, and that legitimacy-seeking behavior may undermine organizational performance.

Author

• Cyrus Dioun, University of Colorado Denver