Abstract
When confronting discriminations during the buying process, the consumers may perceive unfair transactions and some untrustworthy providers. Price steering is a common manipulation of listing offers tailored to a customer’s request. The consumers receive a same-products list in a different order for the same query on e-shop. The study questions whether its performance is related to discrimination among consumers. This paper mobilizes the theory of Justice to explore perceptions of fairness and trust in the practice of price steering. The proposed framework states that the post-purchase stage reveals perceptions intervening in the effect of price steering on willingness to pay.An experiment with a total 883 respondents is simulating an online shopping. The list of options shown online is manipulated. This study documents the main effect of price steering such as a higher willingness to pay and driving online purchasers toward certain choices. This effect is found to generate up to 20% of extra revenue. The analysis also finds a negative influence on perceptions with no difference between the discriminated segments of the market. Implications for researchers and managers: the pricing schemes should be carefully tailored to maintain fairness, as well as profitability, by considering rate parity across online channels and purchasing experiences.
Highlights
Personalization in web search helps a provider to give the user more relevant products
This study documents the main effect of price steering such as a higher willingness to pay and driving online purchasers toward certain choices
There is a lack of understanding of how price steering is influencing the consumer’s perceptions during online shopping for tourism products from a theoretical, methodological and practical point of view
Summary
Personalization in web search helps a provider to give the user more relevant products. The first research question is to identify if the performance of price steering is related to behavioral characteristics of market segments. There is a lack of understanding of how price steering is influencing the consumer’s perceptions during online shopping for tourism products from a theoretical, methodological and practical point of view. Consumers are expected to adjust their behavior to price customization by changing their attitudes and their willingness to book with the OTA. Their results support the proposition that the consumers’ reactions to tourism websites’ discrimination are better understood and managed by considering ethical as well as gender issues but they are limited to only one scenario of price steering. The last section discusses the implications of the model and the findings
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