Consumers' Willingness to Pay for Corporate Reputation: The Context of Airline Companies

Prior studies of corporate reputation have looked broadly at the relationship between corporate reputation and corporate performance. In this paper, we take a more fine-grained approach. In particular, we investigate consumers' willingness to pay for organizational attributes that have historically predicted corporate reputation, in this case, for airlines. Using a policy-capturing or scenario-based design, we determine how airline customers choose between a series of ticket options. The findings provide two important insights into corporate reputation. First, they demonstrate that consumers are willing to pay more for a better corporate reputation. Secondly, they demonstrate that consumers base their willingness to pay on organizational attributes, but that they do so primarily through corporate reputation. These findings suggest that corporate reputation research has an important place within our understanding of corporate strategy.