2019
Working Paper
HBS Working Paper Series

Relative Performance Transparency: Effects on Sustainable Choices

By: Ryan W. Buell, Shwetha Mariadassou and Yanchong Zheng

Format:Print
| Language:English
| Pages:37

Abstract

We study how transparency into the levels and changes of relative sustainability performance affects consumer choices. Our work considers two forms of transparency: process transparency, in which customers receive information about the company's sustainability performance relative to other companies, and customer transparency, in which customers receive information about their own sustainability performance relative to other customers. Through three studies with 7,308 participants, we observe that revealing the levels of relative performance is more motivating for customers in the process transparency domain, whereas revealing relative changes in performance is more motivating for customers in the customer transparency domain. We employ structural equation modeling to identify the underlying mechanisms for these results. We show that levels information is more reflective of objective performance comparison, thus strengthening motivation in the domain of process transparency. In contrast, changes information helps to mitigate self-serving attribution biases in the customer transparency domain, thus playing a more significant role in affecting motivation.

Keywords

Relative Performance Tranparency; Process Transparency; Customer Transparency; Levels; Changes; Reflectiveness; Self-serving Attribution Biases; Sustainability; Consumer Choice

Citation

Buell, Ryan W., Shwetha Mariadassou, and Yanchong Zheng. "Relative Performance Transparency: Effects on Sustainable Choices." Harvard Business School Working Paper, No. 19-079, January 2019.