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Article
Publication date: 26 April 2011

Simon Lee, Abdou Illia and Assion Lawson‐Body

This study aims to adopt illusion of control and lateral consumer relationship in order to investigate their effects on price fairness in online auction and group buying…

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8921

Abstract

Purpose

This study aims to adopt illusion of control and lateral consumer relationship in order to investigate their effects on price fairness in online auction and group buying context. These two variables have been known to have strong influences in fairness perception on consumers' decision‐making processes and outcomes.

Design/methodology/approach

The authors draw their conceptual foundations from previous studies, supplement this from the electronic commerce literature, and test the model through laboratory experiments.

Findings

The study demonstrates that consumers' perception on illusion control in price determination and advantageous lateral consumer relationship significantly affect price fairness perception in both the online auction and group buying environments.

Research limitations/implications

The findings are expected to provide researchers with useful insights to conduct future studies on uncovering the nomological networks associated with price fairness perception.

Practical implications

The findings are expected to help managers develop better pricing strategies and design effective dynamic pricing mechanisms.

Originality/value

The paper provides the first integrated perspective on the human decision processes in the dynamic pricing environment in electronic markets.

Details

Industrial Management & Data Systems, vol. 111 no. 4
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 23 August 2013

María Encarnación Andrés‐Martínez, Miguel Ángel Gómez‐Borja and Juan Antonio Mondéjar‐Jiménez

This research involves a review of the principal aspects of the concept of perceived price fairness in consumer purchasing behaviour.

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1686

Abstract

Purpose

This research involves a review of the principal aspects of the concept of perceived price fairness in consumer purchasing behaviour.

Design/methodology

The research reviews the principal aspects of perceived price fairness analysed in the literature. First, it tackles the dimensions of the concept of fairness before examining the dual entitlement principle, from which the idea of reference prices and the term fair price derive.

Findings

The research establishes research ideas for further research into this important topic, which is not currently the subject of much research.

Limitations/implications

The principal limitation of the research is that it only focuses on the consumer, without analysing the vendor's point of view in pricing. Additionally, it is limited to considering the effects of perceived unfairness on satisfaction. In future research it will be important to include aspects such as loyalty or confidence in the decision making process.

Originality/value

The research offers a thorough overview of the concept of perceived price fairness, proposing several future research areas that are better adjusted to the real‐world functioning of this important concept and should lead to improved understanding.

Objetivo

El objetivo de este trabajo es hacer una revisión de los principales aspectos relacionados con la percepción de justicia de precios en el comportamiento de compra del consumidor.

Diseño/metodología

Este trabajo revisa los principales aspectos relacionados con la percepción de justicia de precios analizados en la literatura. Así, en primer lugar se abordan las distintas dimensiones que componen el concepto de justicia, y en segunda instancia, el denominado principio de doble derecho que introduce el precio de referencia y da lugar al término de precio justo.

Hallazgos

Este trabajo plantea líneas de investigación futuras para profundizar en un tema tan importante, pero poco analizado en la actualidad.

Limitaciones/implicaciones

La principal limitación de este trabajo es que se centra solo en la perspectiva del consumidor sin analizar el punto de vista del vendedor cuando fija los precios. Además, se ha considerado únicamente los efectos que la percepción de injusticia tiene sobre la satisfacción, siendo interesante incluir elementos como la lealtad o la confianza en la decisión.

Originalidad/valor

Este trabajo aporta una visión integrada del concepto de percepción de justicia de precios, planteando una serie de líneas de investigación que pueden permitir un conocimiento mejor y más adaptado a la realidad de un concepto tan relevante.

Details

Academia Revista Latinoamericana de Administración, vol. 26 no. 2
Type: Research Article
ISSN: 1012-8255

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Article
Publication date: 6 March 2007

Andreas Herrmann, Lan Xia, Kent B. Monroe and Frank Huber

This paper aims to link conceptually the concepts of price fairness and customer satisfaction and empirically demonstrate the influence of perceived price fairness on…

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13629

Abstract

Purpose

This paper aims to link conceptually the concepts of price fairness and customer satisfaction and empirically demonstrate the influence of perceived price fairness on satisfaction judgments. Further, it seeks to examine specific factors that influence fairness perceptions including price perception and consumer vulnerability.

Design/methodology/approach

The study is conducted in the context of automobile purchases in major German car dealerships. Based on a theoretical conceptualization of the constructs and an empirical pretest, 246 car buyers were surveyed and their fairness perceptions and satisfaction judgments with the car buying process measured.

Findings

The research shows that price perceptions directly influence satisfaction judgments as well as indirectly through perceptions of price fairness. Results also indicated that consumers' vulnerability, which is induced by a perceived demand‐supply relationship and the urgency of need from the consumers' side, had a negative effect on perceived price offer fairness.

Research limitations/implications

The research demonstrated the influence of perceived price fairness on satisfaction judgments empirically. The study was conducted in the context of car purchases and the generalizability of the model should be further tested.

Practical implications

The effect of consumer vulnerability implies that sellers should not only avoid exploiting their customers but should also anticipate consumers' potential feelings of being exploited. Being sensitive to the buyers’ psychological state and assuring buyers of fair treatment will enhance perceptions of price fairness without changing the price offer.

Originality/value

Both the direct and indirect effects of price perception on satisfaction judgment were examined in the paper. Specifically, the influences of consumer vulnerability and price procedure fairness on satisfaction judgments are new and contribute to the dual‐entitlement principle and our existing knowledge in price fairness.

Details

Journal of Product & Brand Management, vol. 16 no. 1
Type: Research Article
ISSN: 1061-0421

Keywords

Open Access
Article
Publication date: 7 October 2021

Yong Wang, Tianze Tang, Weiyi Zhang, Zhen Sun and Qiaoqin Xiong

In this paper, the authors study the effect of consumers' fairness preferences on dynamic pricing strategies adopted by platforms in a non-cooperative game.

Abstract

Purpose

In this paper, the authors study the effect of consumers' fairness preferences on dynamic pricing strategies adopted by platforms in a non-cooperative game.

Design/methodology/approach

This study applies fair game and repeated game theory.

Findings

This study reveals that, in a one-shot game, if consumers have fairness preferences, dynamic prices will slightly decline. In a repeated game, dynamic prices will be reduced even when consumers do not have fairness preferences. When fairness preferences and repeated game are considered simultaneously, dynamic prices are most likely to be set at fair prices. The authors also discuss the effect of platforms' discounting factors, the consumers' income and alternative choices of consumption on the dynamic prices.

Research limitations/implications

The study findings illustrate the importance of incorporating behavioral elements in understanding and designing the dynamic pricing strategies for platforms and the implications on social welfare in general.

Originality/value

The authors developed a theoretical model to incorporate consumers' fairness preference into the decision-making process of platforms when they design the dynamic pricing strategies.

Details

Journal of Internet and Digital Economics, vol. 1 no. 1
Type: Research Article
ISSN: 2752-6356

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Article
Publication date: 12 October 2021

Faruk Anıl Konuk

This study aims to examine the moderating role of private label product type (organic vs non-organic) on the relationships between trust transfer, price fairness

Abstract

Purpose

This study aims to examine the moderating role of private label product type (organic vs non-organic) on the relationships between trust transfer, price fairness, perceived value and brand loyalty.

Design/methodology/approach

The empirical data were gathered with the structured questionnaire from two groups of respondents who had previously purchased organic and conventional private label products. The direct, mediating and moderating effects were analysed with structural equation modelling.

Findings

The findings confirmed the trust transfer between the retail store and private label brand. The results revealed that both store trust and trust in private label brand positively influence price fairness and which, in turn, elicits higher perceived value. Perceived value was also found to influence private label brand loyalty. The multi-group analyses revealed that the magnitude of the trust transfer was accentuated by organic food private label. Furthermore, the relation between trust in private label brand, price fairness and perceived value was also greater in organic food private label.

Originality/value

This study utilized the trust transfer theory and equity theory as a theoretical foundation to provide novel insights into the moderating influence of private label product type on the relationships between the antecedents of private label brand loyalty. The results of the research can help retailers to develop successful private label brand marketing strategies.

Details

International Journal of Retail & Distribution Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-0552

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Article
Publication date: 23 July 2021

Gurmeet Singh, Neale J. Slack, Shavneet Sharma, Asheefa Shaheen Aiyub and Alberto Ferraris

This study examines the influence of service quality dimensions (food quality, physical environment quality and employee service quality) and brand image of fast-food…

Abstract

Purpose

This study examines the influence of service quality dimensions (food quality, physical environment quality and employee service quality) and brand image of fast-food restaurants on price fairness and its consequence on customer retention.

Design/methodology/approach

This survey collected 331 responses using the public intercept method. Data analysis involved performing confirmatory factor analysis (CFA) on the measurement model, followed by structural equation modeling. Moderation analysis was performed using SPSS (model1 in process macro), while mediation was performed using model 4 in process macro.

Findings

Empirical results of this study revealed the positive effect of restaurant service quality dimensions on price fairness and price fairness on customer retention. It also revealed that brand image strengthened the restaurant service-quality/price fairness interrelationship, and that customer satisfaction partially mediated the price fairness/customer retention interrelationship.

Research limitations/implications

Findings of this study are useful to marketers and fast-food restaurateurs in establishing the right combination of service quality dimensions and brand image that increase perceptions of price fairness and increase customer satisfaction and retention.

Originality/value

This study contributes to advancing the theoretical foundations of customers' perceived price fairness and retention research, specifically in the understudied fast-food sector of emerging economies. It extends the application of the equity theory to expose the direct and indirect influences on customer perceived price fairness and customer retention. The findings provide a better understanding of price fairness perceptions.

Details

British Food Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 3 July 2020

Ouidade Sabri, Amina Djedidi and Mouhoub Hani

This study aims to examine the critical role of types of coopetition (upstream/downstream), market structure (concentrated/competitive) and innovation (low vs high degree…

Abstract

Purpose

This study aims to examine the critical role of types of coopetition (upstream/downstream), market structure (concentrated/competitive) and innovation (low vs high degree of innovation) that can affect the way consumers perceive the resulting price (un)fairness of new offerings.

Design/methodology/approach

Three between-subjects experiments involving different participant populations and product categories were conducted to test the research hypotheses.

Findings

The valence of the effect of types of coopetition (upstream/downstream) on price fairness is conditional on the market structure and the degree of innovation associated with the new product offering. Downstream (as opposed to upstream) coopetition is much more detrimental to perceptions of price fairness in a concentrated market than in a competitive and fragmented market. However, within a competitive market, downstream coopetition may lead to greater price fairness perception than upstream coopetition when the new product offering is highly innovative.

Research limitations/implications

The current study uses lab experiments with fictitious scenarios and focuses on two moderating variables: market structure and innovation perceptions. Future research may use field experiments and explore additional moderating variables that may annihilate the negative effect of downstream coopetition on price fairness perception, especially in a concentrated market.

Practical implications

In concentrated markets, firms should opt for upstream rather than downstream coopetition to limit the negative effect the announcement of coopetition has on price fairness evaluation. However, within a competitive market, when the new product offering resulting from coopetition is associated with a high perceived degree of innovation, firms should opt for downstream rather than upstream coopetition because of its positive impact on price fairness evaluation.

Originality/value

To the best of authors’ knowledge, this study is the first to demonstrate that new product development from coopetition has important implications for the perception of price fairness, leading to positive or negative effects depending on market structure and the degree of innovation of the new product offering. It then explores the conditions under which types of coopetition (upstream/downstream) might backfire.

Details

Journal of Business & Industrial Marketing, vol. 36 no. 2
Type: Research Article
ISSN: 0885-8624

Keywords

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Article
Publication date: 21 November 2016

Adam Nguyen and Juan (Gloria) Meng

This research aims to examine how source of funds (paying with company’s funds versus personal funds) affects buyer’s judgments of price fairness and via these judgments…

Abstract

Purpose

This research aims to examine how source of funds (paying with company’s funds versus personal funds) affects buyer’s judgments of price fairness and via these judgments, buyer’s response to prices.

Design/methodology/approach

A scenario-based experiment is used (N = 200). To test the hypotheses, the authors run moderated mediation regression analyses with the help of the PROCESS macro.

Findings

Drawing on fairness heuristics theory, the authors hypothesize and find that relative to when paying with personal funds, when paying with company’s funds, the perceived price difference plays a less significant role, whereas the perceived social acceptability of the pricing practice underlying the price difference plays a more important role in shaping price fairness judgments and, via these judgments, buyer’s response to prices.

Practical implications

The findings generate advice for companies that serve both the business and personal segments (e.g. airlines and hotels). Buyers in the personal segment typically pay with their own money. To persuade these buyers that a price is fair, it is crucial to show that the price represents a good deal for them. Buyers in the business segment often pay with company’s fund. Companies have more flexibility in charging different prices, but they should make sure that the reasons for the price difference are socially acceptable.

Originality/value

This research shows how the relative role of price difference versus social acceptability in price fairness judgments varies as a function of source of funds and how an inconsistency between price difference and its economic impact affects price fairness judgments.

Details

Journal of Product & Brand Management, vol. 25 no. 7
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 24 August 2010

Sarah Maxwell and Lucette Comer

The purpose of this paper is to isolate the effects of personal fairness (the consumer's evauation of the magnitude of the price) and the social fairness (the…

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2093

Abstract

Purpose

The purpose of this paper is to isolate the effects of personal fairness (the consumer's evauation of the magnitude of the price) and the social fairness (the acceptability of the price given the social norms of the society).

Design/methodology/approach

This research adapted the scenarios used in the pivotal fair pricing study conducted by Kahneman, Knetsch and Thaler. To demonstrate the difference between their results and the results when personal and social fairness were separated, the analysis replicated that of Kahneman, Knetsch and Thaler.

Findings

The paper finds that an individual's self‐serving concern for a personally fair price is moderated by their other‐serving concern for a socially fair price.

Research limitations/implications

This research demonstrates that there is a significant difference in the personal and social fairness of price, whether it is a price for goods, wages or rents.

Practical implications

Sellers, employers and realtors can benefit from the knowledge that providing a socially acceptable reason for the increase of a product or rental price or the decrease of a wage can increase the likelihood that the recipients will judge the price increase as being fair.

Originality/value

Prior research into price fairness has confused the two aspects of a fair price. By isolating the two separate components, we clarify how individuals perceive price fairness in the personal sense and how that perception is altered by a concern for fairness in the social sense.

Details

Journal of Product & Brand Management, vol. 19 no. 5
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 20 June 2008

David Martín‐Ruiz and Francisco Javier Rondán‐Cataluña

The purpose of this paper is to explore consumers' perceptions of price unfairness in services, what are its antecedents and when it is important for the consumer. Thus…

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2850

Abstract

Purpose

The purpose of this paper is to explore consumers' perceptions of price unfairness in services, what are its antecedents and when it is important for the consumer. Thus, the central question of this research is whether consumers care about how much profit the service company is making and whether there are significant differences to physical goods.

Design/methodology/approach

Building on justice and equity theory, a causal model is developed – which analyses the main antecedents (seller profits vs customer value), moderators and consequences of perceptions of price unfairness. Structural equation modelling has been applied to test the proposed model.

Findings

The lack of specific tools to measure perceptions of price fairness required the development of a multi‐item scale to capture the complexity of the evaluation. This instrument has been tested for reliability and validity in a variety of settings, with excellent results, and can be appropriate when using the survey as a data collection method. Also, the authors have argued that there should be significant differences due to the nature of the product – service industries vs physical goods– as well as due to the number of available alternatives that the buyer has in the market.

Originality/value

The validity of a new model is tested by means of an empirical research conducted in four different settings, two different services (automobile repair services and music concerts) and their related physical goods (automobiles and music CDs). A multi‐item scale is also developed to capture the complexity of price fairness perceptions. Finally, significant differences between contexts, as well as due to the number of available alternatives present in the marketplace are examined.

Details

International Journal of Service Industry Management, vol. 19 no. 3
Type: Research Article
ISSN: 0956-4233

Keywords

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