Does the Middle Conform or Compete? Quality Thresholds Predict the Locus of Innovation

Anthony Vashevko (accepted, Organization Science)

Where does innovation come from? This research models producer incentives to innovate with a focus on the role of audiences in constructing quality thresholds within markets. Market audiences create mechanisms for identifying the highest quality producers in a market. I highlight a key distinction between fixed quality thresholds (such as accreditations) and quality thresholds that respond to producer quality (such as rankings or best-of-breed awards). Producers evaluate how the inherently risky nature of innovation interacts with these thresholds. The model predicts conditions under which innovation emerges from the best producers in a market, from producers near the threshold in a market, from both, or from nowhere. Such predictions generalize and simplify several existing organizational theories of innovation.

Dynamic Models of Communication in an Online Friendship Network

Brooke Foucault Welles, Anthony Vashevko, Nick Bennett & Noshir Contractor

Visualizing Hierarchical Social Networks

Kurtuluş Gemici & Anthony Vashevko

working papers

Producer Exploration Generates Categories without Audiences

Anthony Vashevko

Category theory finds that markets tend to partition producers into categories and that producers who do not fit one specific category—or who span multiple categories—perform worse than their single-category peers. The major thread of category theory argues that categorizations stem from the bounded rationality of market audiences, who are forced to impose categorizations and ignore miscategorized producers in order to efficiently interact with the market. I present an alternative model in which producers in a market segregate into categories and experience a miscategorization penalty without any reliance on an audience process: working in an uncertain world, producers tend to imitate past successful peers, and an ex-post rationalization process identifies such clusters as categories. Categories reflect, but do not cause, producer success. This model of dynamic exploration of an uncertain world not only accounts for the basic findings of category theory but further explains how categories shift and emerge over time, in ways consistent with recent extensions of the literature. In all cases, miscategorization results not from the limited knowledge of the audience but the limited knowledge of producers. I establish these results in a formal model and simulation.

Pay Attention: Object Consideration as a Mechanism of Network Diffusion

Anthony Vashevko

Theories of diffusion in networks rely on two broad classes of mechanisms: social influence directs the flow of information, and influence affects object valuation. This paper proposes an integrated model of decision-making for the adoption process. This model reveals a neglected middle step between information and valuation: social influence affects whether agents consider a particular object as relevant to the adoption decision. I identify this attention-driving mechanism using data on traders in an online foreign exchange platform. Features of the setting exclude the possibility of information- or valuation-driven diffusion, but traders still adopt one another’s trading behaviors, and they do so most for those rare behaviors that lack external drivers of attention. I discuss the importance of attention- driven diffusion for future work and the value of an integrated decision model in delineating conditions under which existing theories of influence apply.

Network Boundedness as Market Identity: Evidence from the Film Industry

Amir Goldberg & Anthony Vashevko

Network scholars have studied organizational creativity predominantly as a problem of acquiring and integrating information. In contrast, we re-conceptualize the structural tradeoff between brokerage and closure as an identity signal. With Hollywood as our empirical setting, we demonstrate that consumer perceptions of films are structured by a strong status hierarchy, and that boundedness - the extent to which a film's production team comprises an exclusive clique within the network of interpersonal collaborations in the film industry - serves as a signal of artistic quality. We draw on a uniquely detailed dataset of consumer preferences, and take advantage of the lag between film production and consumer evaluation as a means to demonstrate that production team members' career trajectories after a film had been produced have a bearing on audiences' evaluations. Films whose team members went on to collaborate in exclusive circles and thereby, we argue, establishing a high-status identity, tend to enjoy greater post-hoc artistic appreciation than at the time of their release.