What's in a Label? A Series of Essays on Cognition in Markets and the Consequences of Formal Categorization

Markets are social systems. While price is preeminent, it is often insufficient for buyers to determine the value of a product or service. Because of difficult-to-discern heterogeneity in offerings, prices are offered in the context of other kinds of claims, such as the offering’s type, quality, and the endorsements of previous buyers. This is especially the case for markets wherein the `products' defy easy valuation, such as meals at restaurants, art, movies, lectures, and other goods or services where direct human skill is required. A sizeable subfield of sociology has studied categorization in markets. A central premise of this literature is referred to as Zuckerman’s (1999) ‘categorical imperative’: audiences seek to categorize candidates before considering their distinguishing features. Once categorized, the candidates are assessed relative to socially agreed upon criteria as to what is an acceptable candidate within a given category. A host of empirical work in this vein has demonstrated the hazard of failing to be categorized reliably, as well as defying social expectations of category membership. Almost universally, this work has equated category membership with having labels and has generally taken the existence of labels as a given.In my dissertation, I consider the consequences of labeling, with a focus particularly on the interplay among labels and features. My dissertation investigates (a) the causal effect of labeling on the returns to coherent feature combinations, (b) the impact of labeling on similarity, and (c) the potentially positive results of novel label combination. Ultimately, I find evidence that labels and features provide different information depending on market conditions and the composition of audiences