Smith (1896) argued that societal virtues arise through the function of reputational sanctions as self-interested entities engage in repeated transactions. Relationship marketing research, on the other hand, examines sustained business relationships mediated by trust and commitment to the exchange partner. Modern consumers with freedom of choice engage in repeated transactions of general consumer goods without recourse to the coercive power of sanctions or authority. The nature of the actions and the subject matter of such transactions are likely to differ from Smith's assumptions. This study conducts a theoretical examination of the mechanism of interaction and trading entities in persistent exchange using a model that elaborates on social exchange theory (Blau, 1964). Economic exchange is an equivalent exchange with no imbalance between trading entities. In other words, there is no opportunity for persistence. However, the seller considers the consumer's act of selecting a specific product from the myriad choices on the market to be the source of the provision of reward. From the response to this conferral, an incidental social exchange is triggered, and unspecified obligations of return alternate between the transacting entities. A social bond of trust and mutual attachment can be formed by sustaining a voluntary, non-coercive exchange relationship between entities. Consumers who repeatedly purchase within this relationship are not simply engaging in self-interested homo-economicus, but may be subjects with sympathy as described by Sen (1977) since they consider the welfare of the seller their own well-being.

Authors:
Yohei Iwanaga, Kyushu Sangyo University, Japan

About the Presenter(s)
Professor Yohei Iwanaga is a University Professor/Principal Lecturer at Kyushu Sangyo University in Japan

Connect on Linkedin
https://www.linkedin.com/in/yohei-iwanaga-7847b31a4/

Additional website of interest
https://www.facebook.com/profile.php?id=100011129385134

See this presentation on the full schedule – On Demand Schedule

Bookmark