Most, if not all, of the prior research, assumes a positive,
direct link from corporate social responsibility to corporate performance — though there is little conclusive empirical data to prove it. Also, most existing research does not assess the important role of consumers.v

Our three experiments were designed to address those issues. We empirically assessed the role the consumer plays in ultimate company profitability through revenue generated by the prices that consumers are willing to pay for the company’s products.

Of course, increased costs are often involved in ethical production. Conversely, there may be increased long-run costs with unethical production (lawsuits, boycotts, etc.). We focus here on the revenue side of the equation, acknowledging that cost factors must also be considered. If socially responsible behavior by companies influences consumer willingness to pay, then company profitability will also ultimately be influenced by corporate social responsibility.

This research is an important step towards understanding the consumer psychology influencing the price a company can charge. But we believe the impact of our work goes beyond specifically defining the link between ethical corporate behavior and a consumer’s willingness to pay. Indeed, we believe we have made an important contribution to the ongoing debate concerning the link between CSR and company performance with our explicit demonstration of positive and negative asymmetries, our examination of the degree of ethicalness needed for a company to receive a price premium, and the role of consumers’ prior expectations.

The majority of consumer research investigating CSR has used survey instruments to measure attitudes and infer consumer behavior. By using more rigorous experimental designs, we are able to make the claim that the positive act has less of an impact on willingness to pay than the negative act. While researchers have studied asymmetry effects in other domains, few have done so with evidence of equally valenced scenarios, which automatically raises the question of a manufactured asymmetry effect. That is, in some prior research the “bad” information was much stronger in the research design itself than the “good” information. Equally valenced scenarios are absolutely necessary to be able to convincingly support asymmetry effects. Our study design also eliminated the possibility of brand contamination effects by using brands that participants had no knowledge of.