My research with Thomas Gall featured on Insead Knowledge

In 1855, Napoleon III wanted to make the Exposition Universelle an event to rival London’s Great Exhibition. In addition to building an exhibition space to dwarf Crystal Palace, the last monarch of France asked for a ranking of Bordeaux’s most expensive (ergo best) wines. This established the different strata of châteaux, such as premier cru, deuxième cru and so on. With the Bordeaux Classification, we see an early example of industry classification that still reverberates today.

Napoleon III’s goal was to showcase the best French wine at his version of a world fair. But was the classification also in the best interest of the vineyards? This is a relevant question today because similar classifications exist in many industries. Aside from classifications, rankings, industry competitions, trade shows and expert reviews can all be seen as mechanisms that allow consumers to easily compare different products. Are these mechanisms beneficial to an industry or individual firms?

In a recent working paper,…