Human mobility as determinant of price strategy in a fragmented sector: the case of the top quality wine sector

This paper studies the relation between human mobility among firms and price strategy in a top-quality market. In the context of the Italian high-end segment of premium wines, this study proves how the mobility of oenologists among winemakers determined a viral process of diffusion of knowledge. Among the visible effects of this process we explore price strategies by documenting the magnitude of network positions, nodal characteristics, and product attributes on price levels. The paper proves that learning-by-hiring occured by spreading from an initial traditional kernel to the whole high-end segment of the market. We document how the community of oenologists acted as the legitimating actor that allowed traditional and new firms alike to access the distribution channel at a given price level. This role was strategic in this industry, where brands are highly idiosyncratic and the bundle of product attributes requires consumers to have a specific knowledge. The empirical analysis of this paper is performed by using an ordered logit model of over one thousand observations controlling product level and firm level indexes.