Competition, Status, and Markets

While competitive dynamics scholars have been keenly interested in what drives competitive action, the cognitive and psychological antecedents to action are far from clearly understood. We explore the role of a specific psychological antecedent - status, in impacting firms’ motivations to launch competitive moves against rivals. The key question, which extant literature does not seem fully equipped to answer, is when and under exactly what circumstances lower- status firms become motivated to launch action against higher-status ones and vice-versa. We use the stimulus-response model in social cognition to build theory which helps to answer the question by considering structural properties of market engagement. We test theory through a field study on gourmet food trucks in an American college town. Three consequences follow from our study – that high-status firms are likely to come under attack from lower-status firms with whom they do not compete in markets, that they are unlikely to be paying attention to those lower-status firms when first attacked, and that they are likely to become aware of and motivated to act against those lower-status firms only after the lower-status firms have occupied key markets.