The Social Norms of Discrete Consumer Exchange: Classification and Quantification - Statistical Data Included

American Journal of Economics and Sociology, The, Oct, 1999 by Sarah Maxwell

SARAH MAXWELL [**]

ABSTRACT. Social norms have been recognized as an important influence in long-term relational exchange between firms. It is here argued that social norms are equally important in short-term discrete exchange that takes place between firms and consumers. The norms of consumer exchange are, however, of a different kind. To clarify the difference, a classification system is presented. Based on the classification, the social norms of discrete consumer exchange are defined and a method of quantifying these norms is proposed. This method should help in the ongoing effort to understand how the social macro-environment influences individual behavior in dyadic exchange.

Gundlach, Achrol, and Mentzer (1995) note a recent shift in the marketing research paradigm toward a concern for the social determinants of economic exchange behavior. As they point out, this shift requires the analysis of often ambiguous concepts. One of these concepts is that of the social norm. Marketing researchers have recognized that social norms are a valuable explanatory variable. Their influence has been depicted in marketing models (e.g., Bagozzi 1978; Kalapurakal, Urbany, and Dickson 1992), tested in relational exchanges (e.g., Dant and Schul 1992; Heide and John 1992; Kaufmann and Stern 1988), and cited in the marketing orientation literature (e.g., Hurley and Hult 1998; Slater and Narver 1995).

The focus here is on the social norms of economic exchange, a subset of the social norms of a given society. In economic exchange, the investigation of social norms has considered primarily the norms of long-term, relational transactions common in inter-firm exchange. Little research has considered the social norms of the more short-term, discrete transactions common in exchanges between businesses and consumers. However, Kaufmann and Stern (1988: 535) suggest that norms "exist in all exchange behavior, from very discrete transactions to highly relational exchange."

The identification of the social norms of discrete consumer exchange is important to the understanding of the social structure of markets. On a practical level, it also helps marketers minimize consumer hostility. For example, consumers were outraged when Merck distributed its AIDS drug through a channel that charged a 37% markup (Wall Street Journal, May 7, 1996: B1). Merck did not consider the social norms that evidently sanction a 300% markup by consulting firms but not a 37% markup by distributors of pharmaceuticals. To avoid such blundering infractions of social norms, it behooves sellers to understand the social norms of discrete consumer exchange.

I

Social Norms

IN GENERAL, social norms are rules shared by a group for contextually bounded behavior: they depend on the situation and the roles of the participants (Gibbs 1989). For instance, it appears to be the social norm to pay caregivers for providing child care to children in a nursery school, but not to pay the same people for providing child care to their own children in their own homes.

There is evident confusion between social norms and attitudes. This confusion stems from both attitudes and social norms being learned predispositions to respond in a consistent manner. Both result in global evaluations that are motivations to action. A major difference, however, is that attitudes apply to everything, the evaluation of any psychological object (Ajzen and Fishbein 1980). In contrast, social norms apply specifically to behaviors.

Another major difference is that attitudes, although influenced by the group, are individually held. Social norms, however, are beliefs about generally approved behavior that most individuals share with the group even if they do not agree with them personally. Research has shown that individuals develop very clear ideas of social norms that are conceptually separate from the individuals' own beliefs (Neugarten, Moore, and Lowe 1965; Roscoe and Peterson 1989). For example, an individual may believe that one should tip a food server 20% while recognizing that the social norm is only 15%.

Most definitions view social norms from only one side of the exchange (Gibbs 1989). A case in point is the "personal norm" defined by Ajzen and Fishbein (1980) as a person's perception of how significant others think that person should behave. Norms, however, apply to the behavior of both parties to the exchange. For example, Heide and John (1992) consider norms "bilateral expectations" and Rommetveit (1954) distinguishes between the "norm sender" and the "norm receiver." This two-sided perspective is necessary for the examination of the dyadic interaction of buyer and seller since each is both imposing and responding to the social norms. A dyadic perspective is most useful in that it focuses on the most fundamental behavior in an economic transaction: the act of exchange between two social actors (Achrol, Reve, and Stern 1983).

Some but not all norms are functional in the sense that they provide legitimate expectations of another's behavior. People are thereby able to predict the actions of others and to feel confident of others' responses to their own actions. This predictability and confidence serve to facilitate exchange. The participants "save time and effort, not only in whatever external tasks they might be engaged in separately or jointly, but in terms of their respective psychological economies" (Berger and Luckmann 1966: 54). Social norms, therefore, help establish "a stable (but not necessarily efficient) structure to human interaction" (North 1990: 6). Conversely, if the social norms do not correspond to the actual practices, the entire social structure becomes precarious.