Corporate social responsibility and perceived fairness of price increases

Abstract

AbstractConsumers care about the fairness of companies both in terms of corporate social responsibility (CSR) engagement and the fairness of prices. However, the interplay between these domains is not yet well understood. Therefore, this study examines how consumers’ perceptions of CSR engagement affect their perceived price fairness following a price increase. Drawing on cue‐utilization and expectancy disconfirmation theory, the authors propose that perceived CSR engagement exacerbates the negative effect of a price increase on perceived price fairness, because perceived CSR engagement increases consumers’ price fairness expectations which are violated through price increases. These propositions are tested in three experimental studies with samples consisting of approximately 3000 customers of a global furniture manufacturer and retailer (Study 1), as well as participants acquired through a self‐administered online consumer panel (Study 2) and Prolific (Study 3). The experiments yield support for the hypothesized effects and reveal CSR skepticism as a critical boundary condition. The findings extend existing literature on the effects of perceived CSR engagement and pricing on consumer reactions by examining the role of perceived CSR engagement in shaping consumer reactions to price increases and by establishing consumers’ price fairness expectations as the central psychological mechanism.