Valuation arbitrage, destigmatization and black metal - 21 Oct 2020

The extensive evidence on the non-acceptance of stigmatized actors evokes the question of mechanisms of destigmatization. In a research paper, Stoyan Sgourev and colleagues shift the analytical focus from the targeted actor to a self-interested third party by highlighting the role of valuation arbitrage – a practice capitalizing on discrepancies that stigmatization creates between socially-constructed and objective value across domains.

Its theoretical importance is in prioritizing economic over ideological concerns, and the pursuit of individual gain over upholding social sanctions. The research context is black metal - a music genre that emerged in Norway around 1991, achieving global notoriety when band members were charged with a series of criminal acts.

Sgourev and colleagues analyze destigmatization by estimating the odds of a first record contract of black metal bands with a local or international label. The results expose arbitrage by international labels, who bet on "black" in responding to growing global demand by pursuing a closer association between the music and the crimes.

Exposed to social pressure, Norwegian labels bet on "white", by downplaying purity and authenticity. The analysis attests to dual social evaluation, whereby transgression is reinterpreted in terms of authenticity.