To pay or not to pay a price premium for corporate social responsibility: A social dilemma and reference group theory perspective

Research in the area of corporate social responsibility (CSR) has suggested that some consumers are willing to reward a company by indicating a willingness to pay a higher price for its products ("Yes" group) while other consumers are not ("No" group). This article explains the difference between the two groups by framing the decision to cooperate (for the social good) or defect, as a social dilemma. Using literature from the areas of social dilemma and reference group theory the framework suggests that the difference between the "Yes" and "No" groups will depend on certain individual factors: social value orientation, trust in others, reference group influence (i.e. in-group identity and expectation of others' cooperation), perceived efficacy, and factors that influence the costs of cooperation to the individual such as product substitutability and product preference. Using an internet sample of 468 U.S. coffee consumers, test results show that with the exception of an individual's social value orientation, all other above factors significantly differentiate between the "Yes" and "No" groups.