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When Is Honesty The Best Policy? The Effect of Stated Company Intent on Consumer Skepticism

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  • Grier, Sonya A.

    (Stanford U)

  • Forehand, Mark R.

    (U of Washington)

Abstract

Prior research suggests that consumers evaluate firms more negatively if they attribute the firm's business practices to firm-serving motivations rather than to motivations that serve the public good. The authors propose an alternative hypothesis: firm-serving attributions lower evaluation of the firm only when they are inconsistent with the firm's expressed motive. As such, the negative effect of consumer skepticism regarding a firm's motives can be inhibited by public acknowledgment of the strategic benefits to the firm. The power of this inhibition procedure was demonstrated in an experiment that manipulated the salience of firm-serving benefits and the firm's publicly stated motive. Consumer evaluation of the sponsoring firm was lowest in conditions when firm-serving benefits were salient and the firm outwardly stated purely public-serving motives. This experiment also revealed that the potential negative effects of skepticism were the most pronounced when individuals engaged in causal attribution prior to company evaluation. Finally, this study measured the different effects on attribution and evaluation of two distinct forms of skepticism: situational skepticism--a momentary state of distrust of an actor's motivations--and dispositional skepticism--an individual's ongoing tendency to be suspicious of other people's motives.

Suggested Citation

  • Grier, Sonya A. & Forehand, Mark R., 2002. "When Is Honesty The Best Policy? The Effect of Stated Company Intent on Consumer Skepticism," Research Papers 1665r, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:1665r
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    References listed on IDEAS

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