The effect of second movers’ legitimation work on audience perception and selection

This experiment is a part of our paper "Your ancestors worked hard for this legitimacy!: Theory and experiment on the inauthenticity of second movers." In this experiment, participants will be given information about a nascent industry where there are two firms—a first mover firm and a follower firm. Participants will be given information that, as it begins, the nascent industry suffers from the lack of legitimacy. They will be told that a follower firm enters this industry, either shortly after the first firm (i.e. when the industry still lacks legitimacy) or a while after the first firm entered (i.e. when the industry is perceived to be much legitimized than before). When the follower firm enters shortly after the first firm, they jointly put a lot of effort into legitimizing it. When the follower firm enters after the industry is largely legitimized, it suggests that the follower firm does not participate in such effort. The key idea we aim to show is that audiences may give a different level of authenticity-based penalty to follower firms, depending on whether or not those follower firms participated in legitimizing the nascent industry (i.e. whether they engaged in legitimation work). We theorize that when audiences recognize that follower firms had put significant effort into industry legitimation, they will gain in perceived authenticity and thereby a lower market penalty.