Signals of novelty and their legitimacy

Signaling novelty can be an important mechanism of organizations to sustain audience appeal. We investigate when audiences perceive novelty as a quality of products. Our theoretical arguments combine the organizational literature on market signals with the work on categories, the main streams that this study contributes to. Difference-in-difference analyses of app producers’ update behavior in Google Play U.S., the largest market for mobile apps, confirm our hypothesis that novelty can be a normative value and belief of audiences: App producers implicitly make choices about signaling novelty when releasing updates for their apps and they face varying constraints of within-category mobility that determine the legitimacy of their updates. Whereas minor updates are appealing when within-category mobility is low, that is when exchanges are considered to be stable and long-lived, they are less appealing with increasing within-category mobility. By contrast, major updates yield significant audience appeal when ...