Über die Autorin bzw. den Autor

Joel M. Podolny is dean and William S. Bienecke Professor of Management at the Yale School of Management. His articles have appeared in the American Journal of Sociology, American Sociological Review, and Administrative Science Quarterly.

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"This is a terrific book, a must-read. It will undoubtedly wield tremendous influence on the development of economic sociology."--Ezra W. Zuckerman, Sloan School of Management, Massachusetts Institute of Technology

"This book will appeal not only to organizational and economic sociologists but also to scholars in areas such as social inequality and status attainment, as well as to micro and industrial organization economists. Podolny advances his arguments with great care, and tests them with painstaking precision. The value of his ideas, and the research they will inspire, make this a worthy contribution to a number of fields."--Mark Mizruchi, Professor of Sociology and Business Administration, University of Michigan, author of The Structure of Corporate Political Action

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Status Signals

Princeton University Press

Introduction

WE ARE ALL FAMILIAR with the popular image of the academic researcher, high atop an ivory tower in serene and sublime contemplation. While this image provides fodder for those who are critical of the alleged detachment of higher education from practical concerns, it also is probably one of the initial attractions for those who choose academia as a profession. Certainly, I found the image strongly appealing when I decided to pursue a Ph.D. more than fifteen years ago. However, in the intervening years, I have come to the conclusion that academic research has all the serenity and sublimity of a wrestling match. Ideas and research findings do not float in through the tower window on a breeze; rather, like Gulliver's Lilliputians, they tug, pull, taunt, and elude easy capture. An idea that seems downright insightful on one day turns out to be completely wrongheaded the next. Sometimes one happens upon an unanticipated empirical finding that suggests a promising research path; however, after a week or longer, the promising path turns into a dead end. Often there is the challenge of pulling together what initially seemed to be a disconnected smattering of findings-some of which were anticipated and some of which were not. In order to be able to make significant progress, one is forced to transform sublime contemplation into active obsession, allowing half-formed ideas and initial findings to keep a grip on one's thoughts long enough that one can finally discern a pattern or clarify a concept. If one begins to believe in the mirage of well-specified ideas flowing in through the window on a breeze, there are well-meaning colleagues and blind reviewers to quickly and unsympathetically bring one back to one's senses.

Since roughly 1990, I have been wrestling with understanding how various facets of the concept of status relate to the market. Usually, we think of status in the context of relations among individuals or groups of individuals-for example, the pecking order among cliques in a U.S. high school, the deference displays in medieval courts, or the restrictions and constraints on interaction in a caste society. We think of status less often as a property that firms possess. Sometimes we might make passing reference to status distinctions among firms-noting for example that a bank is particularly prestigious, a law firm is a "white-glove firm," or that a brand has "class." Yet, even in those instances when we acknowledge status differences among firms, we generally do not give much attention to understanding how these status distinctions arise, are maintained, or are changed over time.

Like others, I had not given the concept of status in markets much thought, but when I was a graduate student at Harvard, I read a book on the investment banking industry by Robert Eccles and Dwight Crane called Doing Deals. In one of the chapters, the authors observed that investment bankers obsess about how their status compares with the status of other banks. As I discuss in chapter 3, the investment banking industry is unique in that it has "tombstone advertisements" that serve as tangible indicators of firm status in this industry. However, the more that I thought about Eccles and Crane's observation on the status obsession itself, the more that it seemed that this obsession was probably not unique to investment banks. As I looked at books and articles on different industries-from accounting to fashion to toys-it became clear that firms, like individuals, are deeply concerned with their status. However, none of these industry studies provided much in the way of systematic information about the underlying causes, consequences, and mechanisms related to those distinctions. Nonetheless, because sociologists had thought deeply about the concept of status among individuals, it seemed reasonable to try to extend and apply sociological thought on status to understanding the way in which status operates in the market.

I started along this path after being excited and inspired by the research that had emerged in economic sociology during the 1980s. Since Harrison White asked in a provocative 1981 American Journal of Sociology article "Where do markets come from?" a large number of sociologists have been seeking to demonstrate that the operation of the market can be better understood if it is conceptualized as a social mechanism. For example, White conceived of the market as a structure in which the production volumes and revenues of producers could be better understood if one modeled producers as occupying interdependent roles. According to White, producers do not perceive demand curves; rather, they perceive the choices of other producers and pick a pricing/ volume combination that places them somewhere between those producers acknowledged to be slightly lower in quality and those slightly higher in quality. By way of analogy, White (1981) observes that shortly after Roger Bannister broke the four-minute mile-a record many considered unattainable-a number of others did the same. While there clearly are alternative explanations for the quick followers on Bannister's achievement, such as improvements in training and diet, the analogy is nonetheless relevant insofar as it helps connect White's market model to sociological accounts of the role structures within groups. For example, in Street Corner Society (1981), a famous ethnography of a city street gang, William Whyte (1981) observed how the bowling scores of group members were constrained by their position in the social pecking order of the gang. In markets, as in athletic competitions or social groups, "what is possible" is in large measure socially defined by qualitatively differentiated peers looking to each other for cues regarding appropriate aspirations and performance.

While there is general agreement that economic sociology is one of the burgeoning subfields within the discipline, there is a clear lack of consensus regarding the scope of the "new economic sociology" (Swedberg 2003). I would assert that a defining characteristic of economic sociology as it is currently unfolding is that it draws on sociology's broader corpus of analytical constructs to rethink the operation of the market.

One branch of the "new economic sociology" seeks to make clear that the existence of a market mechanism for the allocation of resources is not the inevitable consequence of individuals pursuing their own interests but is instead the consequence of collectivities pursuing a common interest (typically at another collectivity's expense), dominant cultural understandings, as well as state action. This line of research has deep historical roots in Polanyi's classic work The Great Transformation (1944) but has gathered new momentum through the work of Dobbin (1994), Carruthers (1996), Beckert (2002), and Fligstein (2001).

In addition to this line of research exploring the institutional underpinnings of the market, there is a second line of research-the line of research into which this book falls-that focuses on how a market actually operates. At its most fundamental level, the market is a mechanism for matching. However, what determines which buyers are matched with which sellers? What determines the terms of trade-price, quality and quantity of effort-that arise between a particular buyer and seller?

In the standard general...