The Authenticity Paradox: Why the Returns to Authenticity on Audience Appeal Decrease in Popularity and Iconicity

A great deal of research has argued for authenticity as a key firm-level attribute and source of competitive advantage. But we know very little about the boundary conditions related to organizational authenticity. In order to address this, we develop a theory of the social construction of authenticity, how it affects the appeal of a producer’s offerings, and how the market success of these offerings affects the returns to authenticity. We propose that there are two mechanisms, in addition to authenticity, that can drive audience appeal: popularity and iconicity. But increases in both popularity and iconicity also challenge some of the underlying tenets of what the audience considers authentic, namely, intrinsic motivation and the pursuit of social, rather than economic, value. The authenticity paradox, then, is that even as the appeal of authentic offerings increases, their popularity and iconicity diminish the returns to authenticity. We find support for these ideas in the context of the U.S. market for craft beer and discuss the implications of our theory for authenticity research and for the broader market and social dynamics in craft industries.