Authenticity-Based Connections as Organizational Constraints and the Paradox of Authenticity in the Market for Cuban Cigars

Abstract

We explore the organizational consequences that different authenticity claims carry for products and the firms that produce them. To do so, we build on the notion of an authenticity paradox—the idea that seeking to capture demand that is created by perceived authenticity can undermine the very authenticity that generated the demand in the first place. Using an experimental approach, we argue and show that provenance-based claims of authenticity (e.g., location of origin) constrain a firm spaciotemporally, limiting their ability to expand production in ways that might be economically rational but would undermine this authenticity claim. We further show there is no penalty (or there is a reduced penalty) when the claim is not explicitly spaciotemporal, and is instead based on an association to an iconic individual broadly connected to that place. We show how these types of connections help firms respond to the authenticity paradox by allowing them more freedom to expand production to meet the increased demand without undermining the original claims to authenticity. As a result, this paper’s key contribution is in moving beyond explaining how perceived authenticity benefits organizations and instead, explores how different claims to authenticity can constrain a firm’s ability to capture the value that it has created from authenticity.