Green business and online price premiums: Will consumers pay more to purchase from environmentally friendly technology companies?

Robert St Louis, Joseph A. Cazier

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Scopus citations

Abstract

This study explores the "green" business model for the digital economy. Specifically, it asks whether online consumers will pay more to purchase from a company that they perceive to be socially responsible when it comes to the environment. We conduct an experiment where consumers are presented with different facts regarding the environmental practices of a fictional online retailer of digital music, movies and MP3 players, and are then asked to indicate the maximum price they would be willing to pay for these products. Each consumer first reacts to an environmentally neutral company, followed by an environmentally friendly company and an environmentally unfriendly company presented in a random order. Results show a significant difference between the maximum prices consumers are willing to pay for products with each group, with the environmentally friendly company receiving a modest premium over the neutral group and with the environmentally unfriendly company experiencing a steep price drop for their products compared to the neutral group where many consumers indicate that they would not purchase at any price from the environmentally unfriendly company. Our findings have practical implications for the digital economy as companies look for ways to differentiate themselves from competitors.

Original languageEnglish (US)
Title of host publication16th Americas Conference on Information Systems 2010, AMCIS 2010
Pages4828-4843
Number of pages16
StatePublished - Dec 1 2010
Event16th Americas Conference on Information Systems 2010, AMCIS 2010 - Lima, Peru
Duration: Aug 12 2010Aug 15 2010

Publication series

Name16th Americas Conference on Information Systems 2010, AMCIS 2010
Volume7

Other

Other16th Americas Conference on Information Systems 2010, AMCIS 2010
CountryPeru
CityLima
Period8/12/108/15/10

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Keywords

  • Competitive advantage
  • Consumer behavior
  • Digital goods
  • Environmental practices
  • Green business
  • Price premiums

ASJC Scopus subject areas

  • Computer Science Applications
  • Computer Networks and Communications
  • Information Systems
  • Library and Information Sciences

Cite this

St Louis, R., & Cazier, J. A. (2010). Green business and online price premiums: Will consumers pay more to purchase from environmentally friendly technology companies? In 16th Americas Conference on Information Systems 2010, AMCIS 2010 (pp. 4828-4843). (16th Americas Conference on Information Systems 2010, AMCIS 2010; Vol. 7).