You ought to know: Why consumers think companies can foresee bad (but not good) side effects

Abstract

Routine business activities often lead to unintended side effects. Prior research suggests that consumers ascribe greater corporate foreknowledge when side effects are harmful (vs. helpful) but offers a controversial explanation and insufficient exploration of its consequences. The current research fills these gaps, offering a heuristic‐based explanation steeped in consumer behavior, while demonstrating the importance of this asymmetry to consumer response. First, a Pilot Study confirms the theoretical processes underlying our explanation. Study 1 tests the role of this foreknowledge asymmetry in predicting implicit bias toward the company. Studies 2 and 3 provide moderation evidence for our heuristic‐based explanation and connect the phenomenon to motive inferences and blame judgments, respectively. In sum, this work provides a novel explanation for a common marketplace phenomenon while establishing its effects on several important consumer response variables.