Strategic behavior by market intermediaries

Abstract

Research summary We explore how information intermediaries preserve relationships with firms they cover and differentiate from competitors while also maintaining legitimacy with their audiences. We find that intermediaries evaluating movies and video games delay disclosing more negative reviews of heavily marketed products so that they do not coincide with the major product marketing push. We also find that media organizations artificially differentiate themselves from their competitors. We demonstrate that critics are more deviant when they can observe another's opinion and that differentiation increases when they tend to evaluate the same types of products. Our interpretation is that information intermediaries do not simply provide objective reviews, but instead appear strategic in balancing pressures from product “suppliers” and competitors as they compete for the attention of their audiences. Managerial summary We argue that film and video game reviews by professional media outlets reflect two types of strategic behavior. First, intermediaries evaluating movies and video games delay disclosing more negative reviews of heavily marketed products. Second, critics artificially deviate their review scores from those of close competitors. We conclude that information intermediaries do not simply provide objective reviews, but instead appear strategic in balancing pressures from product “suppliers” and competitors as they compete for the attention of their audiences.

The Power Implications of the Shift to Customer Reviews: A field perspective on jobbing platforms operating in France

“…Dubuisson-Quellier, 2013) or ceremonial conformity (by trying to benefit from producers’ convergent reactivity to dominant assessments, e.g. Olson & Waguespack, 2020). Although sheltering operates in a covert mode in the same way as ceremonial conformity, it does not seek to shape producer behaviours, in contrast to strategies of resistance traditionally developed by dominated evaluation intermediaries producing ratings or rankings.…”

“…However, Dubuisson-Quellier (2013) shows that a dominated evaluation intermediary seeks to make producers reactive to evaluation criteria other than the dominant ones, for instance by trying to ‘convince [ them ] that consumers are now evaluating products differently in relation to their environmental performances’ (p. 684). Olson and Waguespack (2020) also show that dominated evaluation intermediaries can resist by strategically using the same evaluation criteria as the dominant actors while adapting the timing of the release of their assessments. Overall, prior research suggests that dominated evaluation intermediaries can resist reactivity-based domination either openly by (a) making producers reactive to third-party evaluation relying on criteria that differ from those of the dominator (b) or covertly by benefiting from producer reactivity to the criteria used by the dominant evaluation intermediary.…”

Rating systems and increased heterogeneity in firm performance: Evidence from the New York City Restaurant Industry, 1994–2013

“…Our results indicate that the effects of rating systems on how firms capture value may be contingent on the particulars of a given market segment. Prior research examining topics related to ratings, rankings, and evaluations has focused on other cultural settings, including beer and wine (e.g., Benjamin & Podolny, 1999; Frake, 2016), books (e.g., Kovács & Sharkey, 2014; Wang et al, 2018), and movies (e.g., Ferriani et al, 2009; Hsu, 2006; Olson & Waguespack, 2020). Science, particularly the natural sciences, and the legal context, have also proven fruitful research sites (e.g., Sauder & Espeland, 2009; Sauder & Lancaster, 2006).…”

A Change of Tune: The Democratization of Market Mediation and Crossover Production in the U.S. Commercial Music Industry

“…In particular, the rigor of the initial screening stage of the candidate–audience framework (Zuckerman, 1999) appears to hinge on the specific audience under consideration and the structure of market mediation. Moreover, producers’ repositioning efforts after the democratization of market mediation suggest that the research on competitive positioning is incomplete without explicit consideration of the role of intermediaries, who may be concerned with both producers’ positioning and their own positions in the market (Zuckerman, 2000; Bowers et al, 2014; Olson and Waguespack, 2020).…”