Hostname: page-component-8448b6f56d-cfpbc Total loading time: 0 Render date: 2024-04-18T20:52:40.065Z Has data issue: false hasContentIssue false
  • English
  • Français

Managing repugnance: how core-stigma shapes firm behavior

Published online by Cambridge University Press:  23 November 2022

Erwin Dekker Open the ORCID record for Erwin Dekker [Opens in a new window]  and
Julien Gradoz
Erwin Dekker*
Affiliation:
Mercatus Center at George Mason University, Fairfax, USA
Julien Gradoz
Affiliation:
Clersé, Université de Lille, Lille, France
*
*Corresponding author. Email: edekker@mercatus.gmu.edu
Get access Rights & Permissions [Opens in a new window]

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.

Keywords

Competitioncore-stigmadiscriminationpornographyrepugnance

JEL classification

D23: Organizational Behavior • Transaction Costs • Property Rights L14: Transactional Relationships • Contracts and Reputation • Networks L25: Firm Performance: Size, Diversification, and Scope
Type
Research Article
Information
Journal of Institutional Economics , Volume 19 , Issue 6 , December 2023 , pp. 903 - 917
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of Millennium Economics Ltd.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ambuehl, S., Niederle, M. and Roth, A. E. (2015), ‘More Money, More Problems? Can High Pay be Coercive and Repugnant?’, American Economic Review, 105(5): 357–360. doi: 10.1257/aer.p20151034.CrossRefGoogle Scholar
Ascoli, P. M. (2006), Julius Rosenwald, Bloomington: Indiana University Press.Google Scholar
Asher, L. E. and Heal, E. (1942), Send no Money, Chicago: Argus Books.Google Scholar
Bambrough, B. (2019), ‘PornHub and Porn Stars Could be about to Give Bitcoin a Surprise Boost’, Forbes, 18 November. Available at https://www.forbes.com/sites/billybambrough/2019/11/18/pornhub-and-porn-stars-could-be-about-to-give-bitcoin-a-surprise-boost/ (last accessed 30 October 2022).Google Scholar
Becker, G. S. (1993), ‘The Economic Way of Looking at Behavior’, Journal of Political Economy, 101(3): 385–409. doi: 10.1086/261880.CrossRefGoogle Scholar
Berns, W. (1999), ‘Pornography versus Democracy’, Society, 36(6): 16–25.CrossRefGoogle Scholar
Brennan, J. and Jaworski, P. (2015), Markets without Limits: Moral Virtues and Commercial Interests, New York: Routledge.CrossRefGoogle Scholar
Calabresi, G. (2016), The Future of Law and Economics. Essays in Reform and Recollection, New Haven: Yale University Press. doi: 10.12987/yale/9780300195897.001.0001.CrossRefGoogle Scholar
Canadian House of Commons (2017), ‘Intervention of Dr Gail Dines to the Canadian House of Commons’, Standing Committee on Health. Available at https://www.ourcommons.ca/DocumentViewer/en/42-1/hesa/meeting-50/evidence (last accessed 30 October 2022).Google Scholar
Canadian House of Commons (2021), ‘Meeting No. 19 ETHI’, Standing Committee on Access to Information, Privacy and Ethics’. Available at https://parlvu.parl.gc.ca/Harmony/en/PowerBrowser/PowerBrowserV2/20210205/-1/34697?Language=English&Stream=Video (last accessed 30 October 2022).Google Scholar
Carden, A., Courtemanche, C. and Meiners, J. (2009), ‘Does Wal-Mart Reduce Social Capital?’, Public Choice, 138(1): 109–136. doi: 10.1007/s11127-008-9342-6.CrossRefGoogle Scholar
Coase, R. H. (1937), ‘The Nature of the Firm’, Economica, 4(16): 386–405. doi: 10.1111/j.1468-0335.1937.tb00002.x.CrossRefGoogle Scholar
Cohn, D. L. (1976), The Good Old Days: A History of American Morals and Manners as Seen Through the Sears Roebuck Catalogs, New York: Arno Press.Google Scholar
Coslor, E. H., Crawford, B. and Brents, B. G. (2020), ‘Whips, Chains, and Books on Campus: How Emergent Organizations with Core Stigma Gain Official Recognition’, Journal of Management Inquiry, 29(3): 299–316. doi: 10.1177/1056492618810812.CrossRefGoogle Scholar
Dekker, E. and Kuchař, P. (2017), ‘Emergent Orders of Worth: Must We Agree on More than a Price?’, Cosmos + Taxis, 4(1): 23–34.Google Scholar
Devers, C. E., Dewett, T., Mishina, Y. and Belsito, C. A. (2009), ‘A General Theory of Organizational Stigma’, Organization Science, 20(1): 154–171. doi: 10.1287/orsc.1080.0367.CrossRefGoogle Scholar
Emmet, B. and Jeuck, J. E. (1950), Catalogues and Counters: A History of Sears, Roebuck and Company, Chicago: The University of Chicago Press.Google Scholar
Eurosport. (2015), ‘Pornhub Sponsored Team Banned from Football League’, Eurosport, 6 May. Available at https://www.eurosport.com/football/pornhub-sponsored-team-banned-from-football-league_sto4714577/story.shtml (last accessed 30 October 2022).Google Scholar
Fiske, A. P. and Tetlock, P. E. (1997), ‘Taboo Trade-Offs: Reactions to Transactions that Transgress the Spheres of Justice’, Political Psychology, 18(2): 255–297. doi: 10.1111/0162-895X.00058.CrossRefGoogle Scholar
Fox, J. W. (2006), ‘Intimations of Citizenship: Repressions and Expressions of Equal Citizenship in the Era of Jim Crow’, Howard Law Journal, 50(1): 113–201.Google Scholar
Geczy, C. C., Stambaugh, R. F. and Levin, D. (2021), ‘Investing in Socially Responsible Mutual Funds’, The Review of Asset Pricing Studies, 11(2): 309–351. doi: 10.1093/rapstu/raab004.CrossRefGoogle Scholar
Goffman, E. (1963), Stigma: Notes on the Management of Spoiled Identity, New York: Touchstone.Google Scholar
Goichman, R. (2018), ‘Instead of Steering Clear, This Israeli Ad Agency Wants You to Advertise on Porn Sites’, Haaretz, 24 April. Available at https://www.haaretz.com/israel-news/business/.premium-this-israeli-ad-agency-wants-you-to-advertise-on-porn-sites-1.5438530 (last accessed 30 October 2022).Google Scholar
Google (2022), ‘Advertising Policies Help – Sexual Content’. Available at https://support.google.com/adspolicy/answer/6023699?hl=en# (last accessed 30 October 2022).Google Scholar
Goss, A. and Roberts, G. S. (2011), ‘The Impact of Corporate Social Responsibility on the Cost of Bank Loans’, Journal of Banking & Finance, 35(7): 1794–1810. doi: 10.1016/j.jbankfin.2010.12.002.CrossRefGoogle Scholar
Grossman, S. J. and Hart, O. D. (1986), ‘The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration’, Journal of Political Economy, 94(4): 691–719. doi: 10.1086/261404.CrossRefGoogle Scholar
Hampel, C. E. and Tracey, P. (2017), ‘How Organizations Move from Stigma to Legitimacy: The Case of Cook's Travel Agency in Victorian Britain’, Academy of Management Journal, 60(6): 2175–2207. doi: 10.5465/amj.2015.0365.CrossRefGoogle Scholar
Hancock, J. R. (2008), ‘Dixie Progress: Sears, Roebuck & Co. and How It became an Icon in Southern Culture’. PhD thesis, Atlanta: Georgia State University.Google Scholar
Hay, M. (2018), ‘Cryptocurrency Finally Takes Off in the Porn Industry’, Forbes, 31 October. Available at https://www.forbes.com/sites/markhay/2018/10/31/cryptocurrency-finally-takes-off-in-the-porn-industry/ (last accessed 30 October 2022).Google Scholar
Healy, K. and Krawiec, K. D. (2017), ‘Repugnance Management and Transactions in the Body’, American Economic Review, 107(5): 86–90. doi: 10.1257/aer.p20171108.CrossRefGoogle ScholarPubMed
Hern, A. (2017), ‘Millions of Pornhub Users Targeted in Malvertising Attack’, The Guardian, 10 October. Available at https://www.theguardian.com/technology/2017/oct/10/pornhub-adult-site-users-targeted-malvertising-attack-malware-kovcoregs-kovter (last accessed 30 October 2022).Google Scholar
Hodgson, G. M. (2021), ‘On the Limits of Markets’, Journal of Institutional Economics, 17(1): 153–170. doi: 10.1017/S174413742000034X.CrossRefGoogle Scholar
Holt, R. (2017), ‘“I Masturbate Watching these Stats”: The Pornhub Insights Blog and the Collision Between Data, Visualization, and Pornography’. PhD thesis, Montréal: Concordia University.Google Scholar
Hong, H. and Kacperczyk, M. (2009), ‘The Price of Sin: The Effects of Social Norms on Markets’, Journal of Financial Economics, 93(1): 15–36. doi: 10.1016/j.jfineco.2008.09.001.CrossRefGoogle Scholar
Hudson, B. A. (2008), ‘Against All Odds: A Consideration of Core-Stigmatized Organizations’, Academy of Management Review, 33(1): 252–266. doi: 10.5465/amr.2008.27752775.CrossRefGoogle Scholar
Hudson, B. A. and Okhuysen, G. A. (2009), ‘Not with a Ten-Foot Pole: Core Stigma, Stigma Transfer, and Improbable Persistence of Men's Bathhouses’, Organization Science, 20(1): 134–153. doi: 10.1287/orsc.1080.0368.CrossRefGoogle Scholar
Hyman, L. (2018), ‘How Sears Helped Oppose Jim Crow’, The New York Times, 20 October. Available at https://www.nytimes.com/2018/10/20/opinion/sears-catalog-jim-crow.html (last accessed 30 October 2022).Google Scholar
Khalil, E. L. and Marciano, A. (2018), ‘A Theory of Tasteful and Distasteful Transactions’, Kyklos, 71(1): 110–131. doi: 10.1111/kykl.12164.CrossRefGoogle Scholar
Kliemt, H. (1997), ‘The Politics of the Market: A Game Theoretically Informed Legal Philosopher's Account’, Current Legal Theory, 15(2): 3–31.Google Scholar
Lacetera, N. and Macis, M. (2018), ‘Moral NIMBY-ism? Understanding Societal Support for Monetary Compensation to Plasma Donors in Canada’, National Bureau of Economic Research, Working Paper, Number 24572 (last accessed 30 October 2022). doi: 10.3386/w24572.CrossRefGoogle Scholar
Leider, S. and Roth, A. E. (2010), ‘Kidneys for Sale: Who Disapproves, and Why?’, American Journal of Transplantation, 10(5): 1221–1227. doi: 10.1111/j.1600-6143.2010.03019.x.CrossRefGoogle ScholarPubMed
Lemennicier, B. and Wenzel, N. G. (2021), ‘Bioethics, Rent-Seeking, and Death: Examining the Opposition to Kidney Markets’, Journal des économistes et des études humaines, 27(1): 51–74. doi: 10.1515/jeeh-2020-0005.CrossRefGoogle Scholar
Leuker, C., Samartzidis, L. and Hertwig, R. (2021), ‘What Makes a Market Transaction Morally Repugnant?’, Cognition, 212: 104644. doi: 10.1016/j.cognition.2021.104644.CrossRefGoogle ScholarPubMed
Lopes, H. (2018), ‘The Moral Dimensions of the Employment Relationship’, Journal of Institutional Economics, 14(1): 103–125. doi: 10.1017/S1744137417000170.CrossRefGoogle Scholar
Lord, P. (2021), ‘Pornhub: Opening the Floodgates?’, Houston Law Review, 11(2): 54–59.Google Scholar
Michael, S. C. (1994), ‘Competition in Organizational Form’, Journal of Economic Behavior & Organization, 23(3): 269–286. doi: 10.1016/0167-2681(94)90002-7.CrossRefGoogle Scholar
Mirabito, A. M., Otnes, C. C., Crosby, E., Wooten, D. B., Machin, J. E., Pullig, C., Ross Adkins, N., Dunnett, S., Hamilton, K., Thomas, K. D., Yeh, M. A., Davis, C., Gollnhofer, J. F., Grover, A., Matias, J., Mitchell, N. A., Ndichu, E. G., Sayarh, N. and Velagaleti, S. (2016), ‘The Stigma Turbine: A Theoretical Framework for Conceptualizing and Contextualizing Marketplace Stigma’, Journal of Public Policy & Marketing, 35(2): 170–184. doi: 10.1509/jppm.15.145.CrossRefGoogle Scholar
Mjagkij, N. (1992), ‘A Peculiar Alliance: Julius Rosenwald, the YMCA, and African-Americans’, The American Jewish Archives Journal, 44(2): 585–605.Google Scholar
Monllos, K. (2014), ‘Inside Pornhub's Crusade to Tear Down the Taboos of Watching Sex Online’, Adweek, 18 December. Available at https://www.adweek.com/brand-marketing/inside-pornhubs-crusade-tear-down-taboos-watching-sex-online-161910/ (last accessed 30 October 2022).Google Scholar
Morey, M. (2017), ‘Julius Rosenwald was not a Hero’, HistPhil. Available at https://histphil.org/2017/06/30/julius-rosenwald-was-not-a-hero/ (last accessed 30 October 2022).Google Scholar
Morris, C. (2012), ‘Takeover Battle Looms for Publicly Traded Porn Company’, CNBC, 28 March. Available at https://www.cnbc.com/2012/03/28/takeover-battle-looms-for-publicly-traded-porn-company.html (last accessed 30 October 2022).Google Scholar
Morris, C. (2013), ‘Meet the New King of Porn’, CNBC, 17 January. Available at https://www.cnbc.com/id/45989405 (last accessed 30 October 2022).Google Scholar
Nilsson, P. (2020), ‘MindGeek: The Secretive Owner of Pornhub and RedTube’, Financial Times, 17 December. Available at https://www.ft.com/content/b50dc0a4-54a3-4ef6-88e0-3187511a67a2 (last accessed 30 October 2022).Google Scholar
Patterson, K. D. W., Hudson, B. A. and Helms, W. S. (2019), ‘Introduction: A Dialog on Stigma versus Legitimacy, and How They Relate to Organizations and Their Actors’, Journal of Management Inquiry, 28(1): 3–4. doi: 10.1177/1056492618790910.CrossRefGoogle Scholar
Reuters. (2020), ‘Mastercard to Investigate Allegations against Pornhub’, Reuters, 6 December. Available at https://www.reuters.com/article/us-pornhub-payments-idUSKBN28G0KH (last accessed 30 October 2022).Google Scholar
Rips, R. E. (1938), ‘An Introductory Study of the Role of the Mail Order Business in American History, 1872–1914’. PhD thesis, Chicago: University of Chicago.Google Scholar
Rodeschini, S. (2020), ‘New Standards of Respectability in Contemporary Pornography: Pornhub's Corporate Communication’, Porn Studies, 8(1): 1–16. doi: 10.1080/23268743.2020.1788976.Google Scholar
Rossman, G. (2014), ‘Obfuscatory Relational Work and Disreputable Exchange’, Sociological Theory, 32(1): 43–63. doi: 10.1177/0735275114523418.CrossRefGoogle Scholar
Roth, A. E. (2007), ‘Repugnance as a Constraint on Markets’, Journal of Economic Perspectives, 21(3): 37–58. doi: 10.1257/jep.21.3.37.CrossRefGoogle Scholar
Roth, A. E. (2015), Who Gets What – and Why: The New Economics of Matchmaking and Market Design, Boston: Houghton Mifflin Harcourt.Google Scholar
Roth, A. E. and Wang, S. W. (2020), ‘Popular Repugnance Contrasts with Legal Bans on Controversial Markets’, Proceedings of the National Academy of Sciences, 117(33): 19792–19798. doi: 10.1073/pnas.2005828117.CrossRefGoogle ScholarPubMed
Sandel, M. J. (2012), What Money Can't Buy: The Moral Limits of Markets, New York: Farrar, Straus and Giroux.Google Scholar
Satz, D. (2010), Why Some Things Should not be for Sale: The Moral Limits of Markets, Oxford: Oxford University Press. doi: 10.1093/acprof:oso/9780195311594.001.0001.CrossRefGoogle Scholar
Schneider, F., Brun, F. and Weber, R. A. (2020), ‘Sorting and Wage Premiums in Immoral Work’, University of Zurich, Department of Economics, Working Paper, Number 353 (last accessed 30 October 2022). doi: 10.2139/ssrn.3646150.CrossRefGoogle Scholar
Schragger, R. C. (2004), ‘The Anti-Chain Store Movement, Localist Ideology, and the Remnants of the Progressive Constitution, 1920–1940’, Iowa Law Review, 90(3): 1011–1094.Google Scholar
Sen, A. (1970), ‘The Impossibility of a Paretian Liberal’, Journal of Political Economy, 78(1): 152–157. doi: 10.1086/259614.CrossRefGoogle Scholar
Slade Shantz, A., Fischer, E., Liu, A. and Lévesque, M. (2019), ‘Spoils from the Spoiled: Strategies for Entering Stigmatized Markets’, Journal of Management Studies, 56(7): 1260–1286. doi: 10.1111/joms.12339.CrossRefGoogle Scholar
Smith, A. (1984), The Theory of Moral Sentiments, Indianapolis: Liberty Fund.Google Scholar
Smith, V. L. and Wilson, B. J. (2019), Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century, Cambridge: Cambridge University Press. doi: 10.1017/9781108185561.CrossRefGoogle Scholar
Stanger, H. R. (2018), ‘By Mail and Rail: A History of Mail Order and Commerce’, in Stobart, J. and Howard, V. (eds.), The Routledge Companion to the History of Retailing, London: Routledge, pp. 319–339. doi: 10.4324/9781315560854.CrossRefGoogle Scholar
Sullivan, T. J. (1914), Merchants and Manufacturers on Trial, Chicago: Thomas J. Sullivan Company.Google Scholar
Tarrant, S. (2016), The Pornography Industry. What Everyone Needs to Know, Oxford: Oxford University Press.CrossRefGoogle Scholar
Vergne, J. P. (2012), ‘Stigmatized Categories and Public Disapproval of Organizations: A Mixed-Methods Study of the Global Arms Industry, 1996–2007’, Academy of Management Journal, 55(5): 1027–1052. doi: 10.5465/amj.2010.0599.CrossRefGoogle Scholar
Voss, G. (2015), Stigma and the Shaping of the Pornography Industry, London: Routledge.CrossRefGoogle Scholar
Weil, G. L. (1977), Sears, Roebuck, U.S.A., New York: Stein and Day.Google Scholar
Werner, M. R. (1939), Julius Rosenwald, New York: Harper & Brothers.Google Scholar
Williamson, O. E. (1979), ‘Transaction-Cost Economics: The Governance of Contractual Relations’, The Journal of Law and Economics, 22(2): 233–261. doi: 10.1086/466942.CrossRefGoogle Scholar
Wilner, S. J. S. and Huff, A. D. (2017), ‘Objects of Desire: The Role of Product Design in Revising Contested Cultural Meanings’, Journal of Marketing Management, 33(3–4): 244–271. doi: 10.1080/0267257X.2016.1240099.CrossRefGoogle Scholar
Wolfe, A. W. and Blithe, S. J. (2015), ‘Managing Image in a Core-Stigmatized Organization: Concealment and Revelation in Nevada's Legal Brothels’, Management Communication Quarterly, 29(4): 539–563. doi: 10.1177/0893318915596204.CrossRefGoogle Scholar
Yandle, B. (1983), ‘Bootleggers and Baptists – The Education of a Regulatory Economist’, Regulation, 7(3): 12–16.Google Scholar