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Working papers
Working Paper
INSEAD Working Paper No. 2017/68/EFE
Henning Piezunka, Wonjae Lee, Richard Haynes, Matthew S. Bothner (2017)
Strategy and general management
Competition, status, tournament, Matthew effect
Merton often envisioned status growth as a process of stepping across a boundary between one status grade and another, more elite status grade. Such boundaries include the border between graduate school and a top academic department that young researchers try to traverse, or the frontier between scientists outside the French Academy and scientists inside the French Academy. Since it is now common to measure status continuously using network data, the behavioral ramifications of status boundaries have been understudied in recent research. In this essay, we focus on competitive behaviors that emerge near a status boundary because of the desirability - as well as the “double injustice” - of the Matthew effect. Offering insights for future research, we discuss how these competitive behaviors are likely to delay, or even derail, status growth for those who are near a status boundary.
The text of the working paper is available at SSRN.
Human resources management/organizational behavior; Management sciences, decision sciences and quantitative methods; Strategy and general management
Status, U.S., colleges, universities, ranking, peer effects
Individual outcomes in tournaments for status result not only from participants’ own qualities and behaviors, but also from those of their most proximate peers. In this article, we take an alter-centric
view of status dynamics, examining the effect of peers’ perceived quality on future changes in a focal organization’s status. Utilizing the yearly tournaments created by U.S. News & World Report’s rankings of national colleges and universities, two competing predictions are investigated. The first is that peer’ advances in perceived quality impair the future status of a focal school, reflecting inter-school competition for finite resources and rewards. The second is that peers’ improvements incite a focal school to make cosmetic or material adjustments, leading to an
increase in its status. Peers are defined in two ways: by proximity in the prior iteration of the tournament and by network-based structural equivalence. Using fixed effects models predicting
future changes in annual USN ranks, we observe opposing forces at work, depending on the type of peer exerting influence. When peers identified by prior rank proximity improve in perceived
quality, they exert status-eroding effects on a focal school. Conversely, when structurally equivalent peers in the college-applicant market show improvement, the focal school subsequently increases in status. We examine the mechanisms responsible for this divergence by focusing on the bases of each type of peer-affiliation, presenting interaction effects that highlight the contextual conditions that shape the influence of peers on status change. Future directions for research on peer
effects and status are discussed.