Who is Punished Most for Challenging the Status Quo?

Over time, markets evolve into particular structures, with clearly defined roles in terms of who does what in the industry. When a firm ventures beyond these established roles, it often gets punished by its exchange partners. Our interviews in the Champagne grape market, however, suggest that some buyers are penalized more than others in such circumstances. Quantitative analysis confirms that nontraditional buyers receive price penalties for role deviations—through diversification, vertical integration, or disintegration—whereas traditional firms are treated more leniently. A subsequent interpretivist study, using interview data from 78 market participants to explore the exact mechanisms underlying this effect, reveals that sellers blame less traditional buyers when they cross the boundaries of their usual roles because they are thought to act out of volition and bad faith, whereas the same transgressions by more traditional firms are believed to have been necessitated by external circumstances. We conclude that the sanctioning behavior of actors in response to role transgressions by their exchange partners is driven by their interpretation of the motives underlying these transgressions, rather than by the actions themselves. As a result, nontraditional firms may find it difficult to deviate from the traditional roles in their industry.