In this talk, I will discuss two papers that investigate how information transparency about environmental and social impacts influence consumers’ decisions. In the first paper, we focus on the dimension of supply chain visibility and experimentally investigate when consumers value greater visibility into a company’s social responsibility practices. In our design, greater visibility is represented by lower uncertainty in the outcomes of a company's social responsibility efforts. Our results show that consumers value greater visibility either when workers in the upstream supply chain are disadvantaged or when consumers use uncertainty as an excuse not to pay for social responsibility (i.e., they exhibit a self-serving bias). In addition, we observe that high prosocial consumers do not exhibit strong reciprocal motives. Conversely, reciprocal motives significantly increase low prosocial consumers' valuations under high visibility. These results offer insights into what social responsibility information resonates with a company's target consumers.
In the second paper, we focus on the dimension of relative performance transparency and examine how transparency into the levels and changes of relative sustainability performance affects consumer behavior. We consider two scenarios of relative comparison: a company versus the industry average (other-other comparison) and the focal consumer versus other consumers (self-other comparison). In a series of online consumer choice experiments, we show that under the scenario of other-other comparison, transparency into the company's current level of sustainability performance, relative to the industry average, has a more powerful impact on influencing consumers' purchase behavior than transparency into the company's change in performance over time. Conversely, under the scenario of self-other comparison, transparency into the focal consumer's change in sustainability performance over time, relative to other consumers, has a more dominant effect in motivating sustainable behavior than transparency into the consumer's current level of performance. Preliminary results from a third and ongoing study demonstrate that individuals’ self-serving attribution biases are a major driver for these contrasting results.
Yanchong (Karen) Zheng is a Sloan School Career Development Professor and an Associate Professor of Operations Management at the MIT Sloan School of Management. Karen's research studies fundamental and emerging operations management problems with a critical lens on the behavioral factors impacting human decisions, particularly in information-rich environments. She works on a diverse range of areas including supply chain information sharing, environmentally and socially responsible supply chains, supply chain risk management, as well as consumer behavior in pricing and revenue management. Her research integrates theoretical modeling of OM problems with empirical investigation of human behavior. Karen has won several paper awards from the INFORMS society, including the 2014 Management Science Best Paper Award in Operations Management. She has received the NSF CAREER Award to support her research on trust and information transparency in operations. Karen holds undergraduate and master’s degrees from Tsinghua University in China and a PhD in Management Science and Engineering from Stanford University.