Inferred Resource Diversion

Inferred Resource Diversion

Reviewed by Faisal Zaidi

George E. Newman, Margarita Gorlin and Ravi Dhar identified a lay theory that turns a good deed into a reason not to buy. Consumers are less likely to purchase a green product when they perceive that the company intentionally made it better for the environment than when the same environmental benefit arose as an unintended side effect. The inference is about budgets: if the firm meant to do it, it must have taken something away from making the product good.

What it is

The authors test the mechanism rather than assuming it, and their account is a lay theory of resource allocation. An intended enhancement leads consumers to assume the company diverted resources away from product quality, and that assumption drives the reduction in purchase interest. They report a boundary condition based on the type of enhancement, and show that the effect generalises to other perceived trade-offs, including the familiar one between healthfulness and taste. Nothing in it requires the consumer to doubt the firm's sincerity, which is what distinguishes it from the insincerity mechanism it is often confused with.

In effect

The implication for anybody told to lead with their purpose is severe and is not a matter of tone. Announcing the intention is the thing that triggers the inference, and the same benefit presented as a side effect did not produce the drop. It also sits neatly against the largest synthesis of this literature, which found that after willingness to pay, the outcome such initiatives move least is the belief that the company makes good products. Sankar Sen and C. B. Bhattacharya had named product quality as a moderator thirteen years before the mechanism was isolated.

What it does not say

It does not come with numbers. The paper is closed, the abstract names no studies, samples or effect sizes, and none is printed here. It does not say that a social benefit always costs sales, since the unintended version produced no such penalty and the authors report a boundary condition on the type of enhancement. And it is not a finding that any company actually diverted anything, since the whole construct is an inference the consumer makes about a budget they cannot see.

Sources

  1. Newman, G. E., Gorlin, M., & Dhar, R. (2014). "When Going Green Backfires: How Firm Intentions Shape the Evaluation of Socially Beneficial Product Enhancements." Journal of Consumer Research, 41(3), 823-839. doi:10.1086/677841. Abstract read in full; the paper is closed at Oxford Academic and the number of studies, sample sizes and effect sizes are not established.
  2. Sen, S., & Bhattacharya, C. B. (2001). "Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility." Journal of Marketing Research, 38(2), 225-243. doi:10.1509/jmkr.38.2.225.18838. Names product quality as a moderator.
  3. Coelho do Vale, R., Matos, P. V., & de Almeida, F. (2026). "Meta-Analysis on the impact of Corporate Social Responsibility Initiatives on Consumer Attitudes and Behavior." BRQ Business Research Quarterly, 29, article 23409444251368391. doi:10.1177/23409444251368391. Full text read; the source of the finding that perceived quality is among the least-moved outcomes.