Sustainable consumer behavior literary review

Background

The old corporate adage has for decades a rule that no business is supposed to ethically be held liable or accountable for anything beyond tax contributions and shareholder value maximization. The former allegedly serves as the pooled base for financing long-term or large-scale projects, whereas the latter underpins the very incentive structure, driving the behavior of equity markets. An agency framework featuring multiple players, acting as agents on behalf of their principals is routinely seen as the micro-level domain of contractual law.

Over the past decades, the two agendas have merged to suggest that corporate players ought to act ethically beyond weak legal compliance or tax optimization, as a part of their CSR (corporate social responsibility) facet of sustained edge, or wide moat. No allocation can qualify as optimal, as long as it acts to deplete the scarce resources irrevocably without seeking to compensate for the permanent loss with excessive and well-defined benefits. Likewise, the society cannot be expected to overlook major social costs or negative spillovers, which renders any shirking or abusive business player - a rent seeker whose access to superior opportunities may and should be restricted.

Discussion

Somewhat loosely defined, the ‘supply-side’ sustainability agenda has maintained corporate wide moat as contingent on, or inherently intertwined with, just how carefully the business agent strikes a balance over each stakeholder group’s interests in domains, as diverse as, consumption variety and quality, environmental impacts, and societal outcomes, such as institutional change or compliance — intergenerationally.

The ‘demand-side’ counterpart issue pertains to how consumer choice could come in complementary, with respect to CSR. Attitudes, perceived values, and emotive responses drive or inform sustainability choice beyond the conventional needs or preferences, albeit in ways that might point to or allow for alternate scenarios or mixed patterns. The current literature survey is aimed, among other things, to identify the mechanisms or content-based mapping that could potentially rationalize how deliberation cost or otherwise cognitive and emotive ‘satisficing’ acts to either inform or sterilize sustainability laden habits.

As an early attempt at integrating the two complementary layers (which have in many ways been approached as largely orthogonal for practical purposes), the notion of user-centered design has long been proposed in line with sustainability-driven behavior change. A first tier was the now-conventional social media marketing (SMM), whereby the hypothetical or would-be audience is involved in articulating and constructing their preferences on an ongoing basis, such as via social networks. The ‘designing-in’ mechanism further stepped in to suggest how sustainability could increasingly be embedded in private choice early on, while conveying a high perceived value of sustainability features or shopping modes as a part of the edge.

In fact, this process may have to be split via a kind of backward induction, showcasing how prior beliefs or intents could be qualified or complemented by posterior satisfaction over the long haul. Mugge, Schifferstein, and Schoormans have demonstrated how this could be best applied to durable goods, albeit in ways having little to do with the rational or functional component of value per se. Of special importance could be the one-way or asymmetric causality, whereby it is an emotive attachment that fosters overall satisfaction, yet not necessarily the other way around. Rational utility and emotive facets of value alike affect both. One ironic implication that is fully in line with multi-stage or reinforced behavior change could be that the ultimate or core drivers prove of, but second-order relevance when it comes to informing sustainability habits.

Kim and Chung have attempted a dual perspective, while building on the theory of planned behavior. The latter strand of literature looks into the ex-ante parameters or inputs, such as an awareness or consciousness in predicting how the resultant preferences might map into behavior or habits. Although there is an important interim set of mediators, notably norms and controls, as well as past experience based expectations, it remains to be seen exactly how social norms turn into personal priors with an eye on whether a history of choice suffices as a reinforcer.

Park and Ha may have provided a partial answer in finding that it is this interim layer of norms and attitudes, or their relative weight, that bridges the consumption sustainability gap with an eye on ‘green’ products. In effect, the part lower-level beliefs play would seem relatively minor in line with Mugge, Schifferstein, and Schoormans.

Carrete, Castano, Felix, Centeno, and Gonzalez have proposed an endogenization of an alternative sort, in showing how green habits, as opposed to interim attitudes or prior beliefs, have largely been conditional on the tight budget constraints and a thrift culture, rather than arbitrary preferences or ways in which beliefs are affected or informed by scientific evidence. However, it appears questionable whether the perceived gap between ‘modernity’ versus ‘legacy’ can explain the time or change dimension that is missing in both.

The previous emerging-economy setup, capturing the trade-off between the high marginal or opportunity cost, accruing in the short run versus a vague certainty equivalent of private contribution to sustainability savings, could gain some further robustness in carrying over to the more affluent societies, still featuring a rather mixed ‘green’ propensity. Buder, Feldmann, and Hamm have observed that a handful of households account for the bulk of ‘green’ purchases, which in any event do not dominate their budget allocation. Other than the value ratio (quality per price) and relative supply, it appears that factor residual generates noise, or mixed patterns on margin. In fact, Moser spotted a similar division, even within the interim layer as norms have outmatched attitudes, while still only ranking second to the shopper’s willingness to pay. It is also evident that the cognitive counterpart of the aforementioned gap between the cost of updating one’s priors or beliefs against the perceived benefits or savings, both private and social ones.

Implications & Research Prospects

Overall, it appears true that the emerging market for ‘green’ products or sustainable solutions is so thin or incomplete that it could further warp, subject to adverse selection. The latter pertains to setups, featuring material marginal costs amidst the unobservable benefits. On the one hand, it would be awkward to deny rationality to customers (weighing in their gains and outlays against the societal outcomes), even if the emotive component of perceived value dominates. On the other hand, suppliers follow suit, in that their incremental investments might not respond very promptly, let alone proactively—again in line with acting upon the preponderant beliefs and preferences, as perceived. One might argue that the scrupulous agency would ideally be about fostering the audience’s genuinely best, long-term interests, while at the same time educating it with respect to superior solutions. However, the moral hazard is largely about the inherent complexity of response mapping, which renders the outcomes as structurally uncertain amidst large and certain outlays or required efficiency scales.

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