Analogical Learning and Categorical Identity during Market Emergence

We examine how the organizational identity of established firms affects their strategic outcomes during the emergence phase of a new market. Drawing on cognitive theories of analogical learning, we build theory about how the established identities of producers influence the fluency with which consumers make sense of novel products, and hence affect valuations. We illustrate this theory through an empirical study of consumer evaluations of de alio entrants during the emergence of the digital camera industry.