Beyond Expectations: Relative Deprivation in Post-Breach Compensation

With increasing data transparency, post-breach compensation has shifted from an individualized process to a socially comparative one, intensifying customer fairness concerns. This study examines how compensation disconfirmation (the gap between expected and actual compensation) and relative deprivation (the perceived unfairness of one’s compensation relative to others) influence negative emotions and customer behaviors. Grounded in Expectation Disconfirmation Theory (EDT) and integrating relative deprivation theory, we analyze customer responses to post-breach compensation through a survey of the 2023 Taiwan data breaches of iRent (n = 381) and Go Smart (n = 225). Findings reveal that relative deprivation has a stronger impact on negative emotions than compensation disconfirmation, highlighting the role of social comparison in fairness assessments. This study underscores the need for transparent, structured compensation strategies that minimize relative deprivation. By proactively managing fairness perceptions, businesses can reduce negative word-of-mouth, collective action, and customer churn, preserving consumer trust and corporate reputation.