Authors:

  • Michael Norton
  • Rohit Deshpandé

Excerpt

Paying Up for Fair Pay: Consumers Prefer Firms with Lower CEO-to-Worker Pay Ratios. Rohit Deshpandé, Michael I. Norton, 2015, Paper. "Prior research examining consumer expectations of equity and price fairness has not addressed wage fairness, as measured by a firm’s pay ratio. Pending legislation will require American public companies to disclose the pay ratio of CEO wage to the average employee’s wage. Our six studies show that pay ratio disclosure affects purchase intention of consumers via perceptions of wage fairness. The disclosure of a retailer’s high pay ratio (e.g., 1000 to 1) reduces purchase intention relative..." Link