Consumer Perceptions of Price (Un)Fairness

Citations Over TimeTop 1% of 2003 papers

Abstract

A series of studies demonstrates that consumers are inclined to beiieve that the selling price of a good or service is substantiaily higher than its fair price. Consumers appear sensitive to several reference points-including past prices, competitor prices, and cost of goods soid-but underestimate the effects of infiation, overattribute price differences to profit, and faii to take into account the full range of vendor costs. Potential corrective interventions-such as providing historical price information, expiaining price differences, and cueing costs-were oniy modestiy effective. These results are considered in the context of a four-dimensional transaction space that iilustrates sources of perceived unfairness for both individual and multiple transactions.

Related Papers

• → Microeconomic Evidence on Price-Setting(2010)21 cited
• → Flexible reservation prices and price inflexibility(2007)2 cited
• Price Setting in Lithuania: More Evidence from the Survey of Firms(2011)