Dimensions of price differential policies and seller trustworthiness: a social justice perspective

Abstract

PurposeThis research seeks to identify three dimensions of price differential policies that influence judgments of the distributive, procedural, and informational justice of the policies and of the trustworthiness of the seller.Design/methodology/approachFour price differential policies were compared in a between‐subjects design. Subjects responded to scenarios in which they paid more than a friend for the same product because of a particular policy. Policies were compared on perceptions of fairness (using the social justice framework) and on perceptions of the seller's benevolence and credibility.FindingsConsumer judgments of the informational and procedural justice of each policy depend on three key policy dimensions: whether or not all consumers are informed about how a discount could be obtained; whether consumers who received the discount were pre‐selected on the basis of their traits versus whether they received the discount because of some aspect of their transaction process behavior; and whether or not consumers could influence the amount of the price differential. Additionally, perceptions of procedural justice and informational justice have differential influence on the credibility and benevolence dimensions of trust.Originality/valueThe research offers the first empirically based generalizations about designing price differential policies that can minimize negative consumer judgments of the policy and of the seller. Additionally, the use of a social justice framework yields important insights on the multidimensional nature and consequences of fairness judgments.