Deception aversion, communal norm violation and consumer responses to prosocial initiatives

Companies face increasing pressure to adopt social responsibility initiatives while simultaneously providing shareholder value. However, consumers may respond negatively to 'win-win' initiatives that benefit society while bringing financial gain to the corporation, producing a backlash effect. Previous researchers have attributed this backlash effect to the violation of a communal relationship norm that companies trigger in consumers when communicating their win-win initiatives. We propose the alternative hypothesis that the backlash derives from people's deception aversion. We find evidence supporting deception aversion in three preregistered studies showing that companies are evaluated negatively when their actions differ from those implied by their stated prosocial policy and not, as predicted by the communal norm violation hypothesis, when they merely earn a profit. Our results suggest that companies should not fear that earning a profit from prosocial activities will carry reputational risk, so long as they are transparent

Tainted nudge

Nudges are increasingly used by governments and organizations to promote behaviors like healthy eating or effective financial planning. Due to their cost-effectiveness, such nudges may earn a profit for the nudger. We investigate whether this profit taints nudges, as suggested by recent research showing that altruistic acts can be regarded less favourably if they result in private benefits to the actor. Across seven preregistered experiments, we demonstrate that prosocial nudges are indeed rated less positively if a profit is earned. But this tainting is limited: prosocial but profitable nudges are evaluated much more favourably than merely profitable ones, unless profit -motivated nudgers deceptively claim their motive is prosocial. Our findings apply to both for-profit and non-profit organizations and provide behaviorally informed guidelines for the introduction of nudge interventions. We suggest organizations can avoid the potential risk of backlash by openly disclosing the win-win nature of their prosocial nudges

Reexamining how utility and weighting functions get their shapes: A quasi-adversarial collaboration providing a new interpretation

In a paper published in Management Science in 2015, Stewart, Reimers, and Harris (SRH) demonstrated that shapes of utility and probability weighting functions could be manipulated by adjusting the distributions of outcomes and probabilities on offer as predicted by the theory of decision by sampling. So marked were these effects that, at face value, they profoundly challenge standard interpretations of preference theoretic models in which such functions are supposed to reflect stable properties of individual risk preferences. Motivated by this challenge, we report an extensive replication exercise based on a series of experiments conducted as a quasi-adversarial collaboration across different labs and involving researchers from both economics and psychology. We replicate the SRH effect across multiple experiments involving changes in many design features; importantly, however, we find that the effect is also present in designs modified so that decision by sampling predicts no effect. Although those results depend on model-based inferences, an alternative analysis using a model-free comparison approach finds no evidence of patterns akin to the SRH effect. On the basis of simulation exercises, we demonstrate that the SRH effect may be a consequence of misspecification biases arising in parameter recovery exercises that fit imperfectly specified choice models to experimental data. Overall, our analysis casts the SRH effect in an entirely new light. This paper was accepted by Yuval Rottenstreich, judgment and decision making </jats:p