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

TL;DR

This paper models how companies decide to send authentic or inauthentic social media messages in reactive marketing, considering consumer perceptions, external verification, and confirmation bias, revealing the conditions that foster genuine authenticity.

Contribution

It introduces a game-theoretic model of reactive marketing that accounts for external verification and confirmation bias, highlighting the strategic interplay in co-producing authenticity.

Findings

Self-sufficiency strategies lead to higher authenticity.

External verification can support or hinder authenticity depending on context.

Confirmation bias influences the effectiveness of authenticity strategies.

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.