Corporate Social Responsibility and Consumers’ Reaction: An Experiment

Companies differ in their motivation to corporate social responsibility (CSR) practices, with some companies taking a genuine, altruistic approach and others preferring an opportunistic approach (and attempting to mimic the former). If consumers can distinguish them, they will eventually reward the altruistic (being willing to pay more) and penalize the opportunistic ones. This paper performs an experimental study to assess whether differences in consumers’ willingness to pay are statistically significant for different classifications of CSR activities: i) proactive or reactive, ii) environment, employees, or social, iii) involving more or less expensive products, iv) being performed by firms facing competition or not. Results show that consumers are willing to reward CSR initiatives that follow a reactive approach; consumers’ decisions are more moderate when rewarding initiatives associated with more expensive products; the rewards provided depend on the CSR dimension; a relationship between market structure and consumers’ reaction to CSR was not found.