To Be or Not to Be (Typical): Evaluation-Mode Heterogeneity and Its Consequences for Organizations

Abstract

In markets, individuals use three main evaluation modes to categorize and subsequently value organizations based on received organizational cues: prototype-based, exemplar-based, and goal-based evaluation. Starting with the premise that individual audience members use prototype-based evaluation as a default evaluation mode when receiving expected organizational cues, this paper derives a theory that connects unexpected organizational cues with an individual audience member’s likelihood of switching from prototype-based evaluation to either exemplar-based or goal-based evaluation. Individual audience members’ switches between modes, which we refer to as evaluation-mode heterogeneity, lead to changes in their valuation of typical organizations relative to atypical organizations. Our proposed theory has important consequences for research on valuation in markets accounting for apparently conflicting findings in prior studies, and on optimal distinctiveness.

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