Navigating through difficult times with ethical marketing: Assessing consumers' willingness-to-pay in the sharing economy

The pandemic has severely disrupted the activity and economic growth of co-working spaces, ridesharing, couch surfing, and other services known collectively as the “sharing economy.” Academicians and managers are exploring and experimenting with various strategies to recover losses, build meaningful connections with consumers, and optimize consumer engagement. As the sharing economy strives to recover from pandemic-induced losses, it is crucial to consider factors that might help sharing-economy firms navigate through difficult times. Moreover, value-co creation has been addressed previously in sharing economy research as a unidimensional construct with constrained applicability. Guided by the stimulus-organism-response (S–O-R) framework, the present study focuses on ethical marketing as a strategy for identifying consumer responses—including value co-creation, self–brand connection, and consumers' willingness to pay—that may benefit sharing-economy firms. We have collected the empirical data from n = 403 consumers in the sharing economy. Analyses through structural equation modelling tests reveal that ethical marketing influence value co-creation, self–brand connection, and consumers' willingness to pay. Contrary to our expectations, value co-creation has no influence on consumers' willingness to pay; however, the relationship between value co-creation and consumers' willingness to pay is fully mediated by self–brand connection. Based on empirical results, this study contributes to existing theoretical knowledge regarding ethical marketing and value co-creation literature in the sharing economy and proposes practical implications, including how consumers would be willing to co-create value, establish a self–brand connection, and are more likely to pay in response to ethical marketing.