How fitting! The influence of fence-context fit on price discrimination fairness

Abstract

Price discrimination fairness research demonstrates that the level of familiarity consumers have with a price discrimination tactic influences their fairness judgments. In this paper, the authors empirically demonstrate that these findings are not universal. Specifically, the findings indicate that the fit between the (a) variables upon which the price discrimination tactic focuses and (b) the decision criteria by which products or services offered by the firm are judged (i.e., fence-context fit) moderates the impact of the familiarity on price discrimination fairness judgments. Two experiments examine how the factors of fence-context fit and familiarity lead to different price discrimination fairness judgments and provide process evidence of a critical affective component of consumer response to price discrimination tactics based on suspicion. The findings provide implications for managers to carefully consider price discrimination policies by taking adequate precautions in an effort to reduce perceptions of unfairness.