Consumers Avoid Buying From Firms With Higher CEO-to-Worker Pay Ratios
Details
Serval ID
serval:BIB_EF72796B8565
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Consumers Avoid Buying From Firms With Higher CEO-to-Worker Pay Ratios
Journal
Journal of Consumer Psychology
ISSN
1057-7408
Publication state
Published
Issued date
17/02/2018
Peer-reviewed
Oui
Abstract
We document a novel driver of consumer behavior: pay ratio disclosure. Swiss corporation performance data gathered during a legally mandated pay ratio referendum reveals that salient high pay ratios are associated with decreased firm sales (Pilot Study). An incentive-compatible field experiment shows that, when ratios are revealed, consumers avoid firms with high ratios relative to competitors (Study 1). Finally, the effect of high pay ratios also depends on consumers’ political ideology: Democrats and Independents show decreased purchase intentions for products sold by firms with high ratios, whereas Republicans are unaffected (Study 2).
Keywords
Applied Psychology, Marketing
Create date
28/02/2018 11:43
Last modification date
21/08/2019 6:15