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This article explores the significance of status processes for generating and reproducing hierarchy among producers in a market. It develops a conception of a market as a status order in which each producer's status position circumscribes the producer's actions by providing a unique cost and revenue profile for manufacturing a good of a given level of quality. An examination of pricing behavior among investment banks in the underwriting of corporate securities provides impirical support for this status-based model of market competition. Extension are discussed.
Joel M. Podolny (Fri,) studied this question.