“Does This Sound Like a Fair Deal?”: Antecedents and Consequences of Fairness Expectations in the Individual’s Decision to Participate in Firm Innovation

Abstract

The Internet has given rise to new organizational forms of integrating users into firm innovation. Companies willing to make use of external resources can now outsource innovation-related tasks to huge “crowds” outside the company. The extant literature on participation motives assumes a symbiotic relationship between the firm and external contributors in which both parties have largely complementary motives and are only interested in their own utility. In two experimental simulations, we show that this understanding has to be amended: potential contributors not only want a good deal, they also want a fair deal. Fairness expectations with regard to the distribution of value between the firm and contributors (distributive fairness) and the fairness of the procedures leading to this distribution (procedural fairness) impact the likelihood of participation beyond considerations of self-interest. Fairness expectations are formed on the basis of the terms and conditions of the crowdsourcing system and the ex ante level of identification with the firm organizing it. In turn, they impact the individuals’ transaction-specific reactions and also inform their future identification with the firm. These findings contribute not only to research on open and user innovation but also to theories on organizational fairness by enhancing our understanding of the emergent field of fairness expectations.