Determinants of quality and value perceptions are a central issue for marketers and consumer psychologists alike. Seven experiments (six preregistered; N = 3453, with U.S. American, British, and French participants) show that consumers expect and perceive products made by well-paid workers to be of higher quality. This increases consumers’ choice likelihood and willingness-to-pay for products made by well-paid workers. We suggest that consumers interpret workers’ salaries and satisfaction as costly product quality signals from the firm. Therefore, consumers’ lay theory benefits firms who pay their workers higher salaries. This effect is driven by the consumers’ belief that well-paid workers are more satisfied, and that more satisfied workers exert more effort, resulting in them producing higher-quality products. This suggests that consumers subscribe to a happiness lay theory to determine value. The present work contributes to the theoretical advancement of scholarly literature in marketing, consumer psychology, and applied psychology. We make several practical suggestions for marketing managers, workers’ unions, and policymakers on how to use, communicate, and regulate worker salary and satisfaction information, taking into account worker welfare and fair market competition as well as revenue and profit maximization.
Is Fair Market Competition Regulated under Syariah Law?
