The Marketing System of Exchange Between Regulatory and Political Entrepreneurs Engaging in Arbitrage

Abstract

After receiving cease and desist letters in 2018, Bird strategically developed hospitable relationships with politicians that allowed the scooter-sharing firm to continue operating. Bird acts as a regulatory entrepreneur in seeking unfair legal treatment and the politicians brokering the legal deal as political entrepreneurs. The business models for unfairly changing or applying law represents entrepreneurial arbitrage. A mixed methods approach examines the structure of relationships between regulatory and political entrepreneurs through the Bootleggers and Baptists conceptual lens. Like Bird solving traffic and pollution problems for city leaders, Baptists served as a moral cover for illegal liquor vendors. Guided by a general systems theory, it is found that the micro-level, relational exchanges both assign value to as well as uses intellectual commodities to establish expectations guiding ongoing exchanges. Therefore, a marketing system is uncovered. This research also finds relationships structured by favors in sharp contrast to political markets governed by threats.