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This paper examines the effect of status loss on organizations' price-setting behavior. We predict, counter to current status theory and aligned with performance feedback theory, that a status decline prompts certain organizations to charge higher prices and that there are two kinds of organizations most prone to make such price increases: those with broad appeal across disconnected types of customers and those whose most strategically similar rivals have charged high prices previously. Using panel data from U.S. News & World Report's annual rankings of private colleges and universities from 2005 to 2012, we model the effect of drops in rank that take a school below an aspiration level. We find that schools set tuition higher after a sharp decline in rank, particularly those that appeal widely to college applicants and whose rivals are relatively more expensive. This study presents a dynamic conception of status that differs from the prevailing view of status as a stable asset that yields concrete benefits. In contrast to past work that has assumed that organizations passively experience negative effects when their status falls, our results show that organizations actively respond to status loss. Status is a performance-related goal for such producers, who may increase prices as they work to recover lost ground after a status decline. [web URL: http://asq.sagepub.com/content/61/2/217.abstract]

Table of contents – Volume 61, Issue 2

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The tables of contents are generated automatically and are based on the data records of the individual contributions available in the index of the TIB portal. The display of the Tables of Contents may therefore be incomplete.

165
60th Anniversary Essay: How Journals Could Improve Research Practices in Social Science
William H Starbuck | 2016
184
Task Segregation as a Mechanism for Within-job Inequality: Women and Men of the Transportation Security Administration
Curtis K Chan / Michel Anteby | 2016
217
Status-Aspirational Pricing: The "Chivas Regal" Strategy in U.S. Higher Education, 2006-2012
Askin, N / Bothner, M. S | 2016
254
Loyal to Whom? The Effect of Relational Embeddedness and Managers' Mobility on Market Tie Dissolution
Y Sekou Bermiss / Bruce E Greenbaum | 2016
291
Different Like Me: Why Cultural Omnivores Get Creative Jobs
Sharon Koppman | 2016