Equity Exchange Theory: An Explanation of Prosocial Consumption

Abstract

Some products and services offered in marketing are prosocial, forcing consumers to consider their prosocial attributes in the decision making process. Definitions of prosocial consumption include a variety of complex issues beyond those focused on by popular culture (Devinney, Auger, and Eckhardt 2010; Peloza and Shang 2011). For marketers, these prosocial issues may broadly fall under three macro level pillars of strategic sustainability: economic, social, and environmental (Sheth, Sethia, and Srinivas 2011). However, the broad complexity and heterogeneity of issues within these sustainability pillars implies consumers must vary in sensitivity to prosocial issues when making consumption choices. Whether consumers consume prosocially or not has significant implications on both individual consumer and collective well-being (Mick 2006). I propose that equity theory (Adams 1963; 1965), a theoretical framework established in the management literature, will help explain when, why, and how consumers make prosocial consumption choices. While marketing exchange facilitates greater prosocial consumption, little is known of why consumers fail to engage in both pro-individual and pro-social consumption behaviors. Prior research on prosocial consumption has been met with mixed success, focusing mostly on product attributes in conjunction with information-processing and reasoned action explanations of behavior (Brinkmann and Peattie 2008; Ehrich and Irwin 2005; Luchs et al. 2010; White, MacDonnell, and Ellard 2012). These reasoned action approaches to explaining prosocial consumption are often lost in the context of marketing exchange by assuming that consumers are always rational in their decision-making processes. In particular, the reasoned action approach creates an “intention gap” between the consumer’s intent-to-purchase and the consumer’s actual purchase behavior (De Pelsmacker, Driesen, and Rayp 2005). With respect to prosocial consumption, this “gap” is even wider, since consumers wish to be seen as ethical, caring, and altruistic—sometimes contrary to, or inconsistent with, actual behaviors (Papaoikonomou, Ryan, and Ginieis 2011). The “intention gap” posed by the theory of planned behavior and suggested for further research by Carrington, Neville, and Whitwell (2010) insufficiently explains why consumers say one thing and do another when it comes to prosocial consumption (Prothero et al. 2011). If business is to make more efficient and effective investments in sustainability marketing, then an alternate, consumer-centric framework to prosocial consumption is necessary. However, although understanding prosocial decision-making is important, little research has adequately used theory to explain it; this paper uses marketing exchange theory to create an explanatory framework of prosocial consumer decision-making. This paper integrates equity theory with traditional marketing exchange theory (Bagozzi 1975) to provide a theoretical framework of prosocial consumption. Equity theory (Adams 1963; 1965) explains how justice (fairness) is exchanged within relationships. In the management context, equity theory explains how employees relate with their employers in terms of perceived intrinsic and extrinsic outcomes and inputs. Though the marketplace is different from the workplace, many of the same principles of intrinsic and extrinsic outcomes and inputs are relevant. Sometimes these outcomes (benefits) or inputs are prosocial, sometimes they’re not. Therefore, equity theory better demonstrates how individuals tradeoff self-interested inputs and benefits with collective-interested inputs and benefits through the marketplace exchanges of justice. The equity exchange theory (EET) proposed in this paper uses individual differences to explain these tradeoffs.