Arbeitspapier

Reputation as Insurance: How Reputation Moderates Public Backlash Following a Company's Decision to Profiteer

We examine whether a company's corporate reputation gained from their CSR activities and a company leader's reputation, one that is unrelated to his or her business acumen, can impact economic action fairness appraisals. We provide experimental evidence that good corporate reputation causally buffers individuals' negative fairness judgment following the firm's decision to profiteer from an increase in the demand. Bad corporate reputation does not make the decision to profiteer as any less acceptable. However, there is evidence that individuals judge as more unfair an ill-reputed firm's decision to raise their product's price to protect against losses. Thus, our results highlight the importance of a good reputation in protecting a firm against severe negative judgments from making an economic decision that the public deems unfair.

Language: Englisch

Bibliographic citation: Series: IZA Discussion Papers ; No. 15256

Classification: Wirtschaft
Design of Experiments: General

Subject: fairness
corporate reputation
CEO reputation
CSR
Halo effect

Event: Geistige Schöpfung

(who): Arroyos-Calvera, Danae
Powdthavee, Nattavudh

Event: Veröffentlichung

(who): Institute of Labor Economics (IZA)

(where): Bonn

(when): 2022

Handle: http://hdl.handle.net/10419/263472

Last update: 10.03.2025, 11:46 AM CET

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Arbeitspapier

Associated

Arroyos-Calvera, Danae
Powdthavee, Nattavudh
Institute of Labor Economics (IZA)

Time of origin

2022

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Reputation as Insurance: How Reputation Moderates Public Backlash Following a Company's Decision to Profiteer

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