Stepping out of the shadows: identity exposure as a remedy for stigma transfer concerns in the medical marijuana market

Many legalized markets bear categorical stigma—a vilifying label attached to an industry and its participants—that threatens their performance and survival chances. This happens because audiences avoid engagement with stigmatized organizations to minimize the probability of stigma transfer. Although scholars have explored what strategies stigmatized companies undertake to mitigate their stigma, we know very little about whether and how audiences’ acceptance of stigmatized organizations actually happens and if industry-level processes play a role in this acceptance. We develop a theory of identity exposure predicting that customers will become less concerned about stigma transfer when stigmatized organizations unambiguously reveal their identities by publicly advocating and celebrating their business and when vanguard customers openly discuss stigmatized organizations and their products in public forums. We find support for our theorizing in the analyses of customers’ concerns about stigma in Weedmaps.com—a marijuana-based community—from its inception in 2008 through 2014. Ultimately, our findings and extensive robustness checks suggest that identity exposure within stigmatized industries can alleviate customers’ concerns about stigma transfer and in this way accelerate the market destigmatization process.We gratefully acknowledge financial support from the Gies College of Business at the University of Illinois at Urbana–Champaign and the Spanish FEDER/Ministerio de Ciencia e Innovacio´n – Agencia Estatal de Investigacio´n (Grant RTI2018-097033-B-I00)

Holier than thou? Identity buffers and adoption of controversial practices in the Islamic banking category

Existing scholarship on categories frequently highlights how some category members may violate codes that others diligently abide by. In this paper, we take into account the differences in identity across category members, and ask how these relative differences determine their response to a code-violating change. Taking a case where category members are clearly identified as ‘insiders’ and ‘outsiders’, we argue that insiders’ reaction to a code violation depends upon the extent to which they believe their identity to be distinct from the code violator’s, who might be an insider or an outsider. Specifically, we suggest that it is the presence or absence of an ‘identity buffer’ – i.e., a relative identity advantage – which determines insiders’ reaction. We hypothesize that when a code violation is introduced by a fellow category insider, the focal insider will be more likely to refrain from the practice. When it is an outsider who introduces the code violation, insiders will be more likely to adopt the code violation as long as they can retain an identity buffer. We further posit that when outsiders adopt code-preserving behavior, thus narrowing the identity buffer between insiders and outsiders, it will mitigate insiders’ likelihood of code violation adoption. We test and find support for our hypotheses using data on Islamic banking industry in 12 countries (2003-2014)