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Social comparison among competing firms
Author(s) -
Kim KwangHo,
Tsai Wenpin
Publication year - 2012
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.945
Subject(s) - competition (biology) , context (archaeology) , business , industrial organization , marketing , theory of the firm , microeconomics , economics , ecology , paleontology , biology
Extending social comparison theory to the context of interfirm competition, we investigate whether and under what conditions firms may benefit by deviating from consumers' views concerning firm comparisons. Based on all of the possible dyadic competitive comparisons among the 26 automakers in the United States, we found that: (1) a focal firm enjoys a greater increase in sales than the target firm when it compares itself with a more reputable target firm, even though consumers do not perceive the focal firm to be comparable to the more reputable firm; and (2) a focal firm enjoys a greater increase in sales than the target firm when it avoids comparison with a less reputable target firm, even though consumers compare the focal firm with the less reputable firm. Copyright © 2011 John Wiley & Sons, Ltd.