How collective stress affects price fairness perceptions: The role of nostalgia

Abstract

This research examines how consumers evaluate the fairness of price increases during collective stress situations. Across three collective stress situations (COVID-19, Black Lives Matter protests, and economic downturn), the authors confirm that a collective stress situation evokes feeling of nostalgia as a coping mechanism. When the collective stress situation is more severe, it heightens feelings of nostalgia, which then enhances consumer empathy, such that people tend to infer benevolent motives for a price increase. That is, consumers perceive the price increase as more fair. This research also reveals how a consumer’s political identity can moderate the impact of the perceived severity of the collective stress situation on nostalgia and thus price fairness. As a collective stress situation becomes more severe, conservatives (vs. liberals) experience greater nostalgia, leading to higher perceived fairness of price increases.