What keeps the market ticking? The role of third-party audiences and cognitive embeddedness in shaping competitive dynamics in luxury watchmaking

• 成果类型: Article
• 署名作者: Claes, Kim; Godart, Frederic
• 署名单位: Cornell University; INSEAD Business School
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.3669
• 发表日期: 2025
• 页码: 667-692
• 关键词: auction prices; cognitive embeddedness; core-periphery; luxury watchmaking; semantic networks

摘要

Research SummaryCompetitive dynamics between firms and buyers are shaped by mutually understood conceptual systems that enable market interactions. Third-party audiences, such as the media, play a crucial role in shaping market structure and evolution by facilitating the development of these conceptual systems. Although they do not directly engage in contractual bargaining, third-party audiences stabilize perceptions and facilitate market interactions by cognitively embedding competitive dynamics. Our study examines the coreness of firms within the semantic network of firm names as relayed by the media. We find that higher coreness positively impacts auction prices. This effect is moderated by firm visibility and the tone of media coverage. Our model is tested using a unique dataset from the luxury watchmaking industry.Managerial SummaryWe demonstrate that a firm's performance is shaped not only by how prominently or positively it is featured in the media, but also by the relational context in which it is mentioned. Firms that are frequently mentioned alongside other key industry players are perceived to be the core of the industry, leading to higher auction prices for their products. The effect is strengthened when a firm enjoys frequent and positive media coverage. For managers, our findings underscore the importance of understanding how and why the media associates their brand with others, as this can enhance its value in secondary markets, and thus potentially boost value capture in primary markets. Our analysis explores the luxury watchmaking industry, a setting that is rarely studied.