Managing repugnance: how core-stigma shapes firm behavior

Erwin Dekker and Julien Gradoz ()
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Erwin Dekker: George Mason University [Fairfax]
Julien Gradoz: CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique

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Abstract: This article argues for the need for the empirical analysis of how firms manage repugnance and core-stigmatization. To develop our empirical perspective, we compare the work on repugnance with the existing empirical literature in management on core-stigma and argue that core-stigmatization results from the mobilized repugnance. The core-stigmatized firm faces higher transaction costs. We demonstrate, through a case-study of the strategies of MindGeek/Pornhub in the online pornography market, how transaction costs economics can explain the choice of strategies to deal with core-stigma. Under most conditions, the increased transaction costs lead to vertical and lateral integration of the firm. In a dynamic setting, rival firms might use stigmatization to prevent the entry of a new competitor. Our second case-study on the early decades of the mail-order company Sears, Roebuck, and Company illustrates that repugnance, including racial discrimination, was mobilized by competitors to block the entry of the firm into the market.

Date: 2022-11-23
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Published in Journal of Institutional Economics, 2022, 19 (6), pp.903-917. ⟨10.1017/S1744137422000455⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05717432

DOI: 10.1017/S1744137422000455

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