Relative Performance Transparency: Effects on Sustainable Choices

37 Pages Posted: 29 Jan 2019

See all articles by Ryan W. Buell

Ryan W. Buell

Harvard Business School

Shwetha Mariadassou

Stanford Graduate School of Business, Stanford University

Yanchong Zheng

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: January 2019

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 transparency, process transparency, customer transparency, levels, changes, reflectiveness, self-serving attribution biases, sustainability, consumer choice

Suggested Citation

Buell, Ryan W. and Mariadassou, Shwetha and Zheng, Yanchong, Relative Performance Transparency: Effects on Sustainable Choices (January 2019). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 19-079, Available at SSRN: https://ssrn.com/abstract=3324306 or http://dx.doi.org/10.2139/ssrn.3324306

Ryan W. Buell (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
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617-496-6918 (Phone)

HOME PAGE: http://www.hbs.edu/rbuell

Shwetha Mariadassou

Stanford Graduate School of Business, Stanford University ( email )

Stanford, CA 94305
United States

Yanchong Zheng

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

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