Compensatory Consumption: A Review and Research Agenda Using the Theory‐Context‐Characteristics‐Methodology Framework

ABSTRACT Compensatory consumption refers to consumer behaviors driven by psychological motives to address self‐discrepancies, emotional distress, or identity threats. Although scholarly interest in this topic has grown, a comprehensive synthesis of its theoretical foundations, research contexts, consumer characteristics, and methodological approaches remains limited. This study presents a systematic literature review of 105 peer‐reviewed articles published in Chartered Association of Business Schools (ABS)‐ranked journals, following PRISMA 2020 (Preferred Reporting Items for Systematic reviews and Meta‐Analyses) guidelines and using the TCCM (Theory, Context, Characteristics, Methodology) framework. Articles were initially retrieved from Scopus, Web of Science, EBSCOhost, and Emerald Insight, but only those published in ABS‐ranked journals meeting predefined quality criteria were included. The findings show that compensatory consumption is predominantly explained by self‐discrepancy theory, symbolic self‐completion theory, and compensatory consumption theory. A model is developed to map the relationships among antecedents, mediators, outcomes, and moderators. The review also identifies a shift from materialistic and status‐driven behaviors toward symbolic, ethical, and experiential consumption. It contributes to theory by integrating fragmented perspectives and identifying emerging constructs. This review also provides managerial guidance on ethical positioning, symbolic value creation, and inclusive branding, and outlines future research directions across underexplored contexts, theoretical lenses, and methodological approaches.