Dual Entitlement Revisited: Cultural Differences in Asymmetric Pricing

Abstract

Asymmetric pricing is less prevalent, and perceived as less fair, in collectivist (vs. individualist) cultures because it violates communal norms (Chen et al. 2018). We replicate this cultural difference by directly measuring managers' asymmetric pricing decisions and by priming self-construal among individual consumers as well as using country as a proxy for culture. In addition, we identify tactics that managers can employ to mitigate consumer unfairness perceptions. Together, these findings replicate, generalize, and extend the results in Chen et al. (2018), thereby shedding light on the generalizability of the principle of dual entitlement (Kahneman et al. 1986a, 1986b), a cornerstone of behavioral pricing.