Assimilation or Contrast? Status Inequality, Judgment of Product Quality, and Product Choices in Markets

AbstractMuch of organizational status research has been conducted at the micro level by examining the effect of individual status positions. To answer calls for more status research at the macro level, this study extends psychological research on assimilation and contrast effects to examine how status inequality as a distributional property influences product choices in markets. In the context of U.S. college bowls (a specific type of organization within U.S. collegiate athletics), this study analyzes how the status inequality among bowls influences bowls’ stadium attendance, which reflects the judgment of bowls by football fans as the key buyers. The analyses yield evidence consistent with assimilation and contrast effects. Below the middle level of status inequality, the relationship between status inequality and stadium attendance is positive for low-status bowls but negative for high-status bowls. Above the middle level of status inequality, the relationships are reversed. The effect of status inequality is also stronger for low-status bowls that are newer and thus more uncertain in product quality. These findings make significant contributions to understanding status hierarchies in markets by redirecting organizational status research with a macrolevel view, uncovering cognitive processes underlying buyers’ judgment of products based on organization status, and demonstrating the dynamics of status hierarchies and their consequences for organizations.