Reactive Marketing and the Co-Production of (In)Authenticity

Abstract

Businesses often react to external events by sending pro-social messages on social media that show the sender's alignment with the underlying prosocial cause and enhance their brand image. Consumers are uncertain about the authenticity of such messages because a company can choose to send prosocial messages even when their alignment with the social cause is not genuine. We study the sender's incentives to send (in)authentic messages and the consumer's reactions when an external investigator can verify the sender's message. We find that the sender's equilibrium strategy depends on the receiver's emphasis on external investigation versus their self-signaling incentives. When the receiver is more internally focused, the sender chooses self-sufficiency strategy, building credibility independent of external investigation. When the receiver is more externally focused, the sender can either use self-sufficiency or complementarity, the latter relying on validation by the external investigator. Thus, authenticity is coproduced by the sender, the receiver, and the investigator. Importantly, self-sufficiency results in more authenticity in reactive marketing messages than complementarity. We extend the model to incorporate confirmation bias of the receiver. We show that confirmation bias can act a doubled-edged sword, sometimes making the sender's persuasion task easier and other times making it more difficult.