University of Chicago Legal Forum


Categorical distinctions are foundational to firm competition and regulation. Yet, market categories are notoriously difficult to define. The question of how to delineate markets is well-worn in the antitrust literature but is now the focus of a growing sociocognitive literature in strategy and organizational sociology.1 Historically, there has been little cross-pollination between these research areas. More integration, however, may be increasingly important in modern markets, where change is rapid, new technologies are key differentiators in many traditional industries, and platform competition is on the rise. In this paper, I introduce recent theoretical and empirical advances in sociocognitive research on categories in markets. I describe a theoretical model that incorporates the probabilistic nature of how people categorize, ambiguity in category boundaries, and that multiple audiences are relevant in most markets. Empirically, researchers employ a range of approaches to represent these aspects of market definition, from qualitative studies, to surveys, to computational approaches that leverage recent advances in machine learning applied to large corpora of text. I discuss key implications from this theoretical model and how they might inform market definition in antitrust.

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