Causal Inference in Consumer Response to Inequitable Exchange:&Nbsp; a Case of Deceptive Advertising

ABSTRACT - An attribution/equity-based model of consumer response to inequitable economic exchange was tested by exposing subjects to varying degrees of deceptive advertising. Results suggest some support for equity theory formulations. Although an apparent "ceiling effect' was encountered across the degree of inequity, distress due to inequitable exchange nevertheless varied as a function of perceived inequity. Findings related to attribution theory and derived propositions were somewhat ambiguous; locus of causality manipulations produced results that appear to be discrepant with Kelley's discounting principle.

Citation:

James M. Hunt, Jerome B. Kernan, and Richard W. Mizerski (1983) ,"Causal Inference in Consumer Response to Inequitable Exchange:&Nbsp; a Case of Deceptive Advertising", in NA - Advances in Consumer Research Volume 10, eds. Richard P. Bagozzi and Alice M. Tybout, Ann Abor, MI : Association for Consumer Research, Pages: 136-141.

Advances in Consumer Research Volume 10, 1983      Pages 136-141

CAUSAL INFERENCE IN CONSUMER RESPONSE TO INEQUITABLE EXCHANGE:  A CASE OF DECEPTIVE ADVERTISING

James M. Hunt, Temple University

Jerome B. Kernan, University of Cincinnati

Richard W. Mizerski, Florida State University

[This study was supported by the George A. Ramlose Foundation and the Center for Consumer Research, University of Florida.]

ABSTRACT -

An attribution/equity-based model of consumer response to inequitable economic exchange was tested by exposing subjects to varying degrees of deceptive advertising. Results suggest some support for equity theory formulations. Although an apparent "ceiling effect' was encountered across the degree of inequity, distress due to inequitable exchange nevertheless varied as a function of perceived inequity. Findings related to attribution theory and derived propositions were somewhat ambiguous; locus of causality manipulations produced results that appear to be discrepant with Kelley's discounting principle.

BACKGROUND

How consumers respond to inequitable market exchanges depends on where (to whom) they attribute the cause of that inequity (see Gronhaug and Zaltman 1981; Hunt 1980, 1981; Krishnan and Valle 1979; Valle and Wallendorf 1977; and Zaltman and Wallendorf 1979). The underpinnings of this statement come from the literature of both equity theory and attribution theory.

Equity Theory

Equity Theory is a model that conceives of exchange relationships between individuals in terms of outcome-to-input ratios. Inputs are seen to be those contributions made by an individual to a given relationship, while outcomes are viewed as the consequences derived from that relationship. When inputs and outcomes are distributed unevenly among the participating parties, "inequity" is said to occur. That is, an inequitable relationship exists when one or more of the participants judges his/her outcome-to-input ratio to be less than that of another participant.

One consequence of inequitable exchange is that the participants of such relationships experience distress or tension (see Adams 1963, 1965, 1968; Adams and Freedman 1976; and Walster, Berscheid and Walster 1973). Further, this inequity/distress relationship is seen to be one that is monotonically increasing-the greater the inequity, the treater the degree of distress experienced by participants (Leventhal, Allen and Kemelgor 1969: Leventhal and Bergmann 1969).

Whether experienced in economic transactions or social exchange in general, distress is said to motivate people (Adams 1963; Adams and Freedman 1976; Walster et al. 1973). Individuals who discover they are participants in an inequitable relationship attempt to eliminate their distress by restoring equity. Such attempts, called restoration activity, are of two categories: (i) actual restoration activity refers to activity on the part of individuals aimed at altering inputs or outcomes (their own or those of others in the inequitable relationship ) in a manner that is physically apparent to all participants of the exchange relationship. On the other hand, individuals may restore equity on a psychological basis, in which case they cognitively restructure inputs and outcomes.

This research deals with the actual restoration activity in which consumers engage when confronted with inequitable economic exchange. More specifically, this study is an attempt to track the modifying influence that causal attributions have on such restoration activity. Although several recent studies have attempted to investigate consumer dissatisfaction from an equity theory perspective (Fisk and Coney 1981; Huppertz 1979; Huppertz, Arenson, and Evans 1978; LaTour and Peat 1979; Mowen 1979), none of those has attempted to incorporate the causal inference-making of consumers.

Attribution Theory

The theory that attempts to explain causal inference-making and how that process influences behavior is known as attribution theory. That theory, described as the single most pervasive influence on social psychology over the past decade (Cialdini, Petty, and Cacioppo 1981), is not novel to the arena of consumer research. Numerous studies have employed attributional analyses in their attempts to explain consumer behavior (see Burnkrant 1975; Mizerski, Golden and Kernan 1979; and Scott 1978 for reviews). This is not surprising since the primary concern of attribution theory is the processing of information-in particular, the processing that occurs between stimulus and assignment of causality.

How attribution influences restoration activity involves what Kelley (1972, 1973) refers to as "discounting"- a proposed rule - of attributional processing. This rule states that "the role of a given cause in producing a given effect (event) is discounted if other plausible causes are also present" (Kelley 1972, p.8). Thus, discounting is one means by which attributors purportedly determine the assignment of causality ("locus of causality") for some particular event in their environment.

In terms of the present analysis, discounting comes into play when consumers experience and attempt causally to assess their inequitable treatment (an event) in the marketplace. For instance, when consumers experience such treatment, they may attribute that event solely to some "harm-doing entity"--i.e., the seller, manufacturer, etc.--whose behavior appears to have brought about the inequity. On the other hand, consumers may judge other plausible causes to be operative- causes that are external to the harm-doing agent such as the extant situation, competitive pressure, etc. To the extent that such factors are utilized in consumers' attributional processes, the "causal" role of the harm-doing entity is said to be discounted. It can be reasoned, therefore, that the discounting principle specifies one cognitive processing rule by which consumers assign "cause," or "place blame," for their mistreatment in the marketplace.

The significance of these causal assignments is the impact they have on the two concepts thought to underlie response to inequity: (1) distress due to inequity and (2) motivation to engage in restoration activity. As noted above, inequity results in distress. However, the degree to which people experience distress is said to depend, in part, on the causal assignments they make regarding that inequity (Kelley 1972; Walster et al. 1973; Adams and Freedman 1976). This can be seen from the viewpoint of people who become victims of inequity. When people who are victimized through inequitable exchange attribute that event solely to the internal disposition of the harm-doing agent, they purportedly experience greater degrees of distress than when they view the inequitable event as having plausible external causes. Simply put, when the "cause" of inequity is judged to reside in the agent whose action created it, that agent is viewed as having intended to create the inequity. This situation is said to be more distressing than one in which external factors "mask" such intention. When plausible external factors enter the causal analyses of victims, those factors, or "causes," have the effect of "lessening" the harm-doing agent's responsibility in bringing about the inequitable situation. Accordingly, the degree of distress is less in such situations.

From the relationship between causal assignment and distress, it can be reasoned that motivation to restore equity also is influenced by causal assignments, or loci of causality. Since distress due to inequity leads to motivation to respond, then causal assignments must have an input to response disposition as well. Thus, victims of inequity who attribute that inequity to the internal disposition of the harm-doing agent should be more disposed to engage in restoration activity than those who attribute the cause of inequity to external factors as well. That is, attributions to both the harm-doing agent and external factors should result in a lesser degree of distress.

OBJECTIVES

In sum, attribution theoryCas constructed by KelleyC proffers the notion that causal inferences can explain response to events such as inequitable exchange. The study reported here attempts to test that general proposition in the context of deceptive advertising. The primary question is whet her, and to what degree, the causal assignments made by consumers regarding inequitable exchangeCi.e., product purchase subsequent to deceptionCinfluence the degree of distress they experience and, ultimately, their disposition toward restoration activity.

METHOD

Subjects

A total of 300 female subjects was recruited from the suburban area of alarge midwestern city to participate in an "advertising evaluation task." Various charity groups and parent-teacher organizations served as a basis of selection. As a group, subjects were largely college educated (seventy-seven percent) and came from households with an income of over $20,000 (eighty-four percent). Other demographics showed the group to have an average age of 38 and belong to a family of four (forty percent). Subjects were randomly assigned to one of ten experimental conditionsCsix treatment groups (180 subjects) and four expectancy groups (120 subjects).

Procedure

Subjects were told that they were participating in a project that involved the testing of various advertisements for -several new consumer products. They were then instructed as to the nature of their judgment task. This entailed: (1) reading background information about a particular marketing organization; (2) viewing several print advertisements concerning the firm's products; (3) reading a report on the performance of those products; and (4) responding to various questions designed to learn their "feelings about the particular advertising situation."

After receiving these instructions, each subject received a booklet containing experimental materials. This booklet presented two advertising situations/phases. The first of these situations dealt with an apocryphal electronics firm and served as a subject warm-up task. The second phase involved the "Revcon Corporation," a firm engaged in marketing household products. It was during this latter phase that manipulation- of inequity--misleading advertisingCand locus of causality occurred.

The second phase began with a background report about Revcon. This portrayed the corporation as being in the process of introducing two new products: (1) an upright vacuum cleaner sold under the Revcon name (the experimental product); and (2) a new window cleaner called "Sun Country." Subjects then viewed three Revcon ads for each product. Following this, they read a two-part product performance report and responded to various dependent measures regarding their judgments. In addition, they completed a number of demographic items.

Experimental Promotional Messages

The promotional messages employed in the second phase were designed to manipulate subjects' expectations concerning the performance of Revcon's two products. Subjects were informed that the commercials contained in their booklets represented advertising that Revcon planned to place in various home journals. Each set of three ads (one set for each Revcon product) was based on product attribute information that had been determined through a pilot study. In terms of Sun -Country window spray, the salient features were: (1) cleansing ability; (2) texture (foam or spray); (3) ease of usage (amount of wiping/rubbing necessary); and (4) the degree to which the spray "runs" after application. Attributes employed for the vacuum cleaner were: (1) maneuverability; (2) weight; (3) ease of changing refill bags; (4) "pick-up power;" and (5) ability to vacuum in corners and "tight places." Results of the pilot study indicated that the latter two dimensions played relatively important roles in the product evaluation stage of decision-making. Both sets of commercials made claims of outstanding performance, on all attributes.

Independent Variables

Manipulation of inequity/degree of inequity was carried out by varying information to which subjects were exposed in the product performance section. Subjects were first asked to imagine that after seeing the Revcon advertisements they had decided to purchase a Revcon vacuum cleaner at a price above the average price of existing models." They were further asked to imagine that they actually made this purchase and that the vacuum performed below the level claimed in Revcon's advertising. Thus, subjects were exposed to information indicating the presence of a misleading advertising situation--i.e., a discrepancy between advertising claims and product performance (see Olson and Dover 1978). In essence, subjects were asked to imagine they had participated in an inequitable exchange.

Degree of inequity was manipulated by presenting subjects differential information as to how inadequate actual product performance was. Three levels of inequity were employed.

Mild Inequity Condition. One-third of the treatment subjects read a report stating that the new, just purchased Revcon vacuum cleaner does not perform exactly the way the advertisements claimed it would. This was elaborated in terms of product attributes.

Due to the fact that the Revcon is somewhat heavier and more bulky than you anticipated, you have almost as much difficulty sweeping in corners that you would have with other vacuums.

Moderate Inequity Condition. Another third of the treatment subjects was exposed to a report indicating a slightly greater degree of inadequacy.

Due to that fact that the Revcon is somewhat heavy and bulky, you have just as much difficulty sweeping in corners that you would have with other vacuums.

Severe Inequity Condition. The remaining one-third of the treatment subjects received a report that Revcon's vacuum performed below the level of the average vacuum cleaner.

Due to the fact that the Revcon is heavier and more bulky than other models, you have more difficulty sweeping in corners that you would have with other vacuums.

After reading the narrative accounts of Revcon's performance, subjects viewed "consumer reports" in which each product was rated by attribute and overall performance. The basis of this report was purportedly the opinions of fifty-five consumers who had used the product. As presented to subjects, the rating scores could range from one (poor performance) to ten (excellent). To facilitate interpretation, subjects received a chart to be used as a judgmental baseline (see Figure 1).

FIGURE 1

INTERPRETATION OF AVERAGE SCORES

In the mild inequity condition, the Revcon vacuum cleaner was rated overall at 7.4. Subjects in the moderate inequity group received an overall rating of 5.6 (no better than average), while those in the severe group were exposed to an overall average rating of 4.6.

Locus of causality, the primarY experimental factor, was manipulated by varying the Information to which subjects were exposed in the background section of the second phase. To bring about attributions to the internal disposition of the Revcon Corporation (the harm-doing agent) for the "inequitable exchange," half of the treatment subjects read background information indicating that Revcon was "an extremely large firm."

Because of its size, the Revcon Corporation is a very successful business. There are few firms that rival the corporation.

The remaining half of the treatment group was exposed to information designed to bring about attributions to external factors (as well as to Revcon) concerning the "cause" of the inequitable exchange--i.e., utilization of discounting. Information presented to these subjects described Revcon as a new firm in a relatively weak competitive situation. Thus, the competitive pressure (external to the firm) operating on Revcon was thought to constitute information indicating the presence of a plausible external cause with respect to the misleading advertising. The following description was presented to subjects in this condition.

Because it is a new firm and not very large, the Revcon Corporation has not yet had a great deal of success. It is usually in a position of following its larger rivals.

It should be noted that to reduce the probability that subjects would attribute the inequitable exchange to outside factors such as chance product failures, etc., product performance scores for Sun Country were made to parallel those of the vacuum cleaner. Thus, in the mild inequity condition, Sun country was rated at 7.2 out of a possible ten points; 5.7 in the moderate condition; and 4.7 in the severe condition. It was felt that by varying the Sun Country scores in this manner, subjects' judgments about product performance would be attributed to Revcon, or forces acting on Revcon, and not chance product failures.

Expectancy Groups

In addition to the six treatment groups, four randomly assigned expectancy groups were employed. The primary purpose of utilizing these groups was to ascertain whether subjects developed expectations about product performance as a result of viewing the experimental ads. Thus, immediately after viewing the ads discussed above, expectancy subjects responded to a set of items designed to measure their expectations concerning product performance.

Determination of the extent to which the experimental ads generated expectancies required an information manipulation. Thus, half of the expectancy subjects viewed the same ads that the treatment subjects viewed. The remaining expectancy subjects were exposed to ads that differed from the treatment ads only in terms of one salient feature. The ads presented to the latter group of expectancy subjects contained no information about the Revcon vacuum cleaner's ability to "sweep in corners and 'tight' places." This information difference served as a basis for determining whether subjects who viewed the treatment ads developed performance expectations from information in the experimental ads or through some other (unmeasured) process.

Dependent Measures

Expectancies. Expectancy subjects were asked to judge the likelihood that the Revcon vacuum cleaner would enable the user to "sweep in corners and 'tight' places." Responses to this item were measured on a 15-point bipolar scale ranging from "Very Likely" to "Very Unlikely."

Distress Due to Inequity. After being exposed to performance reports regarding Revcon's products, treatment subject responded to a series of items designed to measure distress. A 7-item Guttman scale was used for this purpose. Subjects responded to this scale by indicating their agreement or disagreement with each of the seven items. These items appear in Figure 2 in their hypothesized order. Order of presentation was randomized.

FIGURE 2

HYPOTHESIZED ORDERING OF ITEMS USED TO MEASURE DISTRESS DUE TO INEQUITY

Response to Inequity. Three general items were employed to assess subjects' disposition. These appear in Figure 3. The theoretical underpinnings of these items are discussed elsewhere (see Hunt 1980, 1981). Subjects indicated (through agreement/disagreement) the likelihood of their taking each of the three general actions. Scales used to measure responses were 15-point bipolar scales ranging from Strongly Agree to Strongly Disagree.

FIGURE 3

EXPERIMENTAL RESPONSES TO INEQUITY

Manipulation Checks

Locus of Causality (Causal Assignments). To determine whether the difference in background information concerning Revcon constituted an adequate manipulation of causal assignments, subjects were asked to Judge the importance of two factors in "influencing Revcon's actions. The first of these was Revcon's internal desire to sell products and make money/profits. The second factor was the competitive pressure on Revcon from the household products industry." Subjects responded to each item on a 15-point bipolar scale ranging from "Extremely Important" to "Extremely Unimportant.

Degree of Inequity. Three measures of source credibility were used to indicate the extent to which subjects' judgments of deception--and thus inequity-had been manipulated by the differential product performance reports. Subjects were asked to race the Revcon Corporation in terms of three traits: (1) believability as a source of information; (2) sincerity as an advertiser; and (3) honesty. Each rating was scored on a 15-point ("Strongly Agree" to "Strongly Disagree") scale.

RESULTS

Design Adequacy

One design requirement was that subjects develop product expectations as a result of being exposed to the experimental advertising. To establish this, a comparison of expectancies was made between (1) those expectancy subjects who viewed ads containing information about the Revcon vacuum cleaner's ability to ' sweep in corners and 'tight' places" and (2) expectancy subjects who viewed ads that did not contain such information. A 1-way analysis of variance showed these groups to differ in the required manner. Subjects who viewed ads containing the attribute information exhibited significantly more positive expectations about the vacuum cleaner's ability to sweep in corners and tight places 7.57 mean likelihood) than did subjects who viewed ads that did not contain such attribute information (6.15 mean likelihood)--F(1,118=5.97, p <0.02.

Manipulation Checks

Locus of Causality (Causal Assignments). Two 1-way ANOVAs were performed on treatment subjects' judgments regarding how important each of two factors was in influencing Revcon's actions: (1) the internal disposition of Revcon; and (2) competitive pressure acting on Revcon. Results showed that subjects who received background information designed to bring about attributions to Revcon r S internal disposition judged that disposition to be marginally more important in bringing about the inequitable situation (13.43 mean) than did the group that received background information designed to produce external attributions (12.71 mean)- F(1,174) s 2.41, p < 0.12. On the other hand, subjects who received background information containing "external cause" information judged the external factor of competitive pressure to have significantly greater import--F(1,174) - 6.35, p <).01. Mean importance scores were 12.12 and 10.64, respectively.

Degree of Inequity. Although differences in all three credibility ratings (across the degree of inequity factor) were significant in the required direction, two groups exhibited no clear-cut differences. [Believability: F(2,173) = 15.15, p < 0.01; Sincerity: F(2,173) = 11.75, p < 0.01; Honesty: F(2, 173) = 14.09, p < 0.01.] As anticipated, the group that was exposed to "mild inequity" conditions rated Revcon as being significantly more believable, sincere, and honest than did each of the remaining (moderate and "severe" inequity) groups. However no such difference was found to exist between the moderate and severe groups. [A Tukey multiple comparison test was applied using a 95 percent confidence coefficient.]

Distress Due to Inequity

As discussed previously, distress was measured by a 7-item Guttman scale. [The coefficient of reproducibility was 0.92 (see Proctor 1971).] Entering this measure into a 2-way analysis-of-variance resulted in findings that are at odds with attribution theory formulations. Table 1 reports the mean distress ratings across the two primary factors, locus of causality and degree of inequity. Results indicate that locus of causality (causal assignments) had no significant main effect on distress ratings. Further, this factor was not found to interact with degree of inequity.

Degree of inequity did Have a significant main effect on subject distress ratings, however F(2,170) a 11.95, p < 0.01. As would be expected, the mild inequity group exhibited significantly less distress than did either the moderate or severe groups. However, as was the case with credibility scores, no significant difference was found to exist between the moderate and severe inequity groups.

TABLE 1

MEAN DISTRESS RATINGS BY LOCUS OF CAUSALITY AND DEGREE OF INEQUITY

Response to Inequity

In terms of restoration activity, the essential prediction of this study is that consumers who attribute an inequitable exchange solely to the internal disposition of the seller will be more likely to engage in actual restoration activity than will those who assign "cause" to external factors- i.e., competitive pressure- as well. Our findings are not congenial to this prediction. This can be seen by considering the results for each of the three response measures presented in Figure 3.

The first measure attempts to assess those response tendencies aimed at restoring equity through reducing the seller's outcomes. Pragmatically, a number of more specific responses could be subsumed under this general response type. Complaining to third parties, taking action through public media, and refusing to buy company sponsored products again are all restoration activities aimed at reducing the harm-doing agent's outcomes. Findings for this response are directly opposite the prediction. As can be seen from Table 2, cell means are greater for those subjects exposed to background information designed to bring attributions to the external factor, competitive pressure- F(1,170) - 3.30, p < 0.07.

TABLE 2

MEAN LIKELIHOOD RATINGS: RESPONSES INVOLVING SELLER'S OUTCOMES

The degree of inequity factor was found to have a significant main effect in the anticipated direction-F(2,170) - 11.32, p < 0.01. Ratings in the mild inequity condition were significantly less than those in either the moderate or severe group. No such difference was found to exist, however, between the moderate and severe inequity groups.

The second response measure involves activity oriented toward increasing consumer outcomes as a means of restoring equity. Analysis of the likelihood ratings for this response produced findings that failed to support the general prediction concerning causal assignment. Locus of causality had neither a main nor interaction effect on subjects' likelihood ratings. Degree of inequity had a significant main effect on those ratings, however- F(2, 70) - 5.29, p < 0.01- and this effect was in the expected direction. The likelihood ratings for subjects in the mild inequity group were significantly lower than those obtained in the moderate and severe inequity groups. Again, the latter two groups were found not to differ.

The third response measure complements the activity of the first two; it deals with inaction on the part of consumers who have experienced inequitable exchange. In terms of causal assignments, it would be expected that consumers who attribute an inequitable exchange to the internal disposition of the seller would be less likely to remain inactive than those who make more external attributions. The results of a 2-way analysis of variance do not support this prediction, however. Table 3 presents the relevant mean ratings. Locus of causality had neither a main nor interaction effect on the likelihood ratings.

As in the other analyses, the degree of inequity factor had a significant bearing on subjects' scores-F(2,170) - 8.96, p < 0.01. That relationship was due to the significantly higher likelihood scores found in the mild inequity condition. As before, there was no statistically significant difference between the moderate and severe conditions.

TABLE 3

MEAN LIKELIHOOD RATINGS: NO IMMEDIATE ACTION

DISCUSSION

Of course this experiment casts subjects in a role-playing context and, in that regard, suppresses its external validity. Obviously, consumers might respond differently to actual, compared with hypothetical, inequity. But our concern was to establish the psychological processes underlying response. And in that inequitable marketing exchange seems to result in distress to consumers and, thus, in their response disposition is suggested by marked differences in all dependent measures across the degree-of-inequity factor. However, the inequity-distress relationship appears to have a limited range; there was no difference in the distress experienced by "moderate inequity" subjects and that experienced by "severe inequity" subjects. This same limitation was observed for the measures of response disposition. As inequity increased, the disposition to engage in restoration activity appeared to increase, but only over the mild to moderate conditions. Beyond this, response disposition did not increase as a function of inequity.

Whether this apparent "ceiling effect" is due to judgments about inequity- i.e., as outcomes are reduced, consumers increasingly judge themselves to be victimized, but only to a point--or whether it is a result of inadequate manipulation is a matter that remains unclear. It should be noted, however, that Fisk and Coney (1981) also report finding a ceiling effect with respect to disconfirmation of expectations.

Results concerning the moderating influence of causal assignment, or locus of causality, are somewhat confusing. Consumers who attribute an inequitable exchange to the internal disposition of the seller do not appear to experience any greater degrees of stress than those who judge external factors to be operating. Various interpretations of this result exist. It may be the case that external attributions to competitive pressure do not lead to a reduction in the seller's "responsibility" for bringing about inequity. Rather, such attributions may entail a conjunction of "causes"- i.e., seller and industry operating together to produce inequity- thus. leading to greater degrees of distress than predicted. Another interpretation of this result is that the subjects responded quite differently to the experimentally contrived judgment task than they would have in actual marketing circumstances. Thus, results concerning distress may not accurately reflect the theoretical underpinnings of attribution and equity theory. This same comment might apply to the results pertaining to response disposition. Certainly, the results surrounding response call into questions predictions that follow from Kelley's discounting principle. How questionable those predictions are, however, is somewhat obscured by the fact that the intervening distress variable did not behave operationally as anticipated. While obviously Kelley's framework provides a theoretically relevant perspective for viewing consumer response to inequitable exchange, perhaps other attributional models would enhance the understanding of that phenomenon ( see Krishnan and Valle 1979).

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