Perceived Price Fairness Research Articles

Digital piracy and the perception of price fairness: evidence from a field experiment

We study a relationship between perceived price fairness and digital piracy. In a large-scale field experiment on customers of a leading ebook store, we employ the Bayesian truth serum to elicit the information on acquiring books from unauthorized sources (often referred to as digital piracy). We provide empirical evidence in support of the conjecture that willingness to “pirate” is associated with having experienced subjective overpricing. We propose and verify the relevance of two mechanisms behind this link: reactance theory and moral cleansing/licensing. The results indicate that pricing policy perceived as fair may reduce the scope for digital piracy.

The effect of privacy choice in cookie notices on consumers' perceived fairness of frequent price changes

AbstractRecent regulatory changes (i.e., General Data Protection Regulation of the European Union) enforce that seller (e.g., retail and service) and all other websites disclose through cookie notices which data they collect and store. At the same time, websites must allow consumers to disagree to the tracking of their browsing behavior. Despite sellers' concern about the loss of consumer insights—as consumers might disagree to the collection of their browsing data—cookie notices might also have a surprising side‐effect: Consumers might accept frequent price changes (from personalized or dynamic pricing) more readily, if they agree through a cookie notice that their behavior can be tracked. Specifically, two experimental studies show that consent to the tracking of browsing behavior increases consumers internal attribution of a price change, as consumers attribute the cause of the change (here: giving up data) to themselves. This increases price fairness perceptions and, in turn, purchase intent. As a result, for online sellers of goods or services the implementation of cookie notice should no longer be thought as a matter to be avoided, but rather a trade‐off decision: Loss of a part of consumer insights versus higher acceptance of data‐driven marketing mix decisions, such as frequent price changes.

Research on the impact of perceived service fairness and price fairness on the complaining behaviour of restaurant customers

Purpose -The aim of research is to determine perceptions of service fairness and price fairness of restaurant customers; to measure how perceptions of service fairness and price fairness affect their complaining behaviour. Methodology - A structured questionnaire technique was used as data collection method. A total of 410 useable questionnaires were collected from customers of 40 restaurants in Karadeniz Eregli. The data collected was analysed using the factor analysis, regression and correlation analysis. Findings- There is moderate positive correlation between perceived service fairness and perceived price fairness in restaurant customers in Karadeniz Eregli. A moderate negative correlation between perceived service fairness and complaining behavior was found. A low negative correlation between perceived price fairness and complaining behavior was found. Conclusion- The study provides practical implications that provides restaurants decreasing their customers’ complaining behaviour and new insight on the relationship between perceived service fairness and perceived price fairness of restaurant customers.

The moderating role of donation quantifiers on price fairness judgments

In the cause-related marketing (CM) literature, transparent communication of donation amounts (e.g., monetary donation quantifiers) has been shown to positively impact the effectiveness of CM campaigns. In practice, however, many firms communicate their donation contributions in more ambiguous terms (e.g., descriptive quantifiers). Across three studies, the authors demonstrate when using monetary quantifiers is less beneficial, due to consumers’ skepticism of firm motives. Study 1 shows that the presence of a CM promotion positively affects perceptions of price fairness. Study 2 provides evidence that donation quantifier formats operate uniquely and impact price fairness through skepticism. Finally, Study 3 demonstrates ways in which practitioners can manage consumer skepticism, which affect perceptions of price fairness and ultimately purchase intent.

Pricing Drivers, Pricing Tactics and Persuasion Knowledge in Retail

The different Pricing Drivers and related attributes shape up the pricing tactics in the retail industry. Pricing Tactics Persuasion Knowledge determines the consumer’s purchase decision based on prior interaction with persuasive actions employed by the brands to close the sales. It all depends upon the PTPK level of the consumers wherein a high PTPK consumer will judge a product differently than a low PTPK consumer. The different pricing strategies employed by the retailer and brands has a direct impact on the customers personal judgement of perceived price fairness which in turn determines the fate of the product where the persuasion is viewed either as a brand gimmick or legitimate offering.

Impact of gaming habits on motivation to attain gaming goals, perceived price fairness, and online gamer loyalty: Perspective of consistency principle

Online games are popular electronic commerce applications that have a business model of selling gaming items to gamers. Such a business model helps gamers attain gaming goals while cultivating their gaming habits. Gaming habits can lead gamers to play games automatically, indicating their impact on gamers. However, little is known about how gaming habits affect gamers’ perceptions of the prices of the gaming items, goal-attaining motivation, and online gamer loyalty. Grounded in the consistency principle, we construct a framework to explain how gaming habits impact motivation to attain gaming goals, perceived price fairness, and online gamer loyalty. We collected 5,144 responses from online gamers and used structural equation modelling to test the research model. We found that gaming habits are positively related to motivation to attain gaming goals and perceived price fairness, which are further positively related to online gamer loyalty. Ours is the first study using the perspective of the consistency principle to examine the mechanism underlying the impact of gaming habits on online gamer loyalty. Our findings provide novel insights for electronic commerce managers that they could focus on enhancing perceived price fairness and motivation to attain gaming goals, thus establishing a loyal user base. Such findings could also apply to interactive hedonic systems, indicating their potential academic impact.

A dynamic perspective on consumers’ price fairness perception: Empirical evidence from the airline industry

This paper investigates the concept of perceived price fairness and its dynamic alteration along the customer buying cycle. Today, variable pricing is widespread in many service industries. Besides the current sales price, customers are extensively exposed to varying external reference prices (for example, advertised prices). Thus, this pricing practice risks being perceived as unfair at some stage along the purchasing process, and negative consumer reactions cannot be ruled out. However, previous research has adopted a quite static approach, which only offered an incomplete picture of fairness perceptions with a specific service offer. To better capture the dynamics, this study conducted a scenario-based experiment with 459 airline customers encompassing repeated measures. The results provide evidence that the perception of distributive and procedural fairness significantly varies with the exposure to changing external reference prices along the buying cycle. Therefore, marketers should be cautious regarding price variations and advertised prices.

How Price Dispersion Influences Intention to Join Online Group Buying: The Role of Perceived Price Fairness

How Price Dispersion Influences Intention to Join Online Group Buying: The Role of Perceived Price Fairness

The interplay of social responsibility consciousness and evaluation mode in consumers’ response toward cause-related marketing-enhanced product

PurposeThe purpose of this paper demonstrate that purchase intention toward a cause-related marketing (CRM)-enhanced product can be positively correlated with consumers’ social responsibility consciousness (SRC) and can be increased or decreased merely by changing the evaluation mode.Design/methodology/approachThe authors conduct three experimental studies with two levels of SRC (high vs low) × two evaluation modes (joint evaluation (JE) vs separate evaluation (SE)) between-subjects design. The dependent variable is purchase intent toward the CRM-enhanced product.FindingsThe results indicate that consumers with high SRC are more likely than those with low SRC to purchase a CRM-enhanced product when two products are presented side by side (JE). However, consumers’ SRC level does not impact purchase intention when they see only one product (SE) independently (Study 1). The authors confirm that the proposed effect is mediated by perceived price fairness toward the product (Studies 2 and 3).Research limitations/implicationsFuture research on CRM-enhanced products should carefully consider that the impact of individuals’ SRC level was in very different directions depending on the evaluation mode. In addition, further investigation is needed to address generalizability issues regarding samples and hypothetical stimuli.Practical implicationsThese findings offer recommendations to help practitioners design effective marketing communications about CRM practice for target markets.Originality/valueTo the authors best knowledge, the current study is the first attempt to explore the crucial role of SRC, presentation mode and their interaction on purchase intention toward CRM-enhanced products.

Towards a new price discrimination strategy

PurposeThe purpose of this paper is to explore the applicability of Pay-What-You-Want (PWYW) pricing multi-channel retailing. Specifically, the impact of PWYW endogenous price discrimination on consumers’ price fairness perception of and reactions to PWYW is investigated.Design/methodology/approachThree empirical studies with different product categories were conducted through lab experiments with student sample using scenario-based experimental approach.FindingsResults indicate the viability of PWYW with lower suggested external reference price. The impact of PWYW endogenous price discrimination is dependent upon the magnitude of price deviation from regular market price and product category. Consumers’ negative perceptions of price differentiation interacted with their underlying beliefs about the retailer’s cost of products across different channels. PWYW acceptance can be fostered in multi-channel by communication of additional-value generated in offline selling.Originality/valueThe current research is possibly the first to explore PWYW viability in the multi-channel context by exploring the consumer’s price perception process and critical consumer reactions through a well-structured research framework.

Dynamic pricing and price fairness perceptions: a study of the use of the Uber app in travels

A precificação dinâmica é considerada um método eficiente na gestão de preços e tem sido adotada por hotéis e companhias aéreas há décadas. Mais recentemente, o aplicativo de mobilidade urbana Uber, presente em mais de 600 países, introduziu a precificação dinâmica em tempo real que busca ajustar a oferta à demanda pelo serviço. Embora a literatura destaque os benefícios dos preços dinâmicos, economistas comportamentais argumentam que essas variações de preços podem ser consideradas injustas. Assim, os objetivos desse estudo são: examinar como consumidores e turistas julgam a justiça dos preços praticados pela Uber; investigar as percepções relacionadas à precificação dinâmica e à supressão da informação sobre o multiplicador da tarifa na solicitação do serviço; e examinar quais são os comportamentos derivados de julgamentos de injustiça dos preços. Trata-se de uma abordagem qualitativa e exploratória cujo método é o grupo focal. Os principais resultados indicam que o julgamento dos preços varia com o contexto e com a avalições dos benefícios do serviço; que a precificação dinâmica é considerada aceitável, mas que, em certas condições, pode desencadear sentimentos de injustiça e emoções negativas em uma parcela considerável de consumidores; e que turistas adotam estratégias comportamentais para minimizar a incerteza dos preços dinâmicos.

The Price of Power: How Firm’s Market Power Affects Perceived Fairness of Price Increases

How does market power affect consumer perceptions and purchase behavior? In the theoretically and pragmatically important context of price increases, we theorize that (i) consumer price fairness perceptions decline with market power when a price increase is due to costs; and (ii) this fairness difference arises due to greater perceptions of controllability and, in turn, exploitation by firms with higher market power. Consistent with our theorizing, we further argue that market power does not affect fairness (iii) when prices rise due to demand (which is perceived as equally exploitative and unfair regardless of firm power) or (iv) when price increases are clearly beyond the firm’s control (and perceived as equally fair for firms with high and low market power). We provide empirical support for these predictions in a series of behavioral experiments combined with an analysis of retail scanner data. Together, our findings shed light on how market power and pricing actions jointly drive consumer perceptions of unfairness, with implications for firms’ pricing strategies, competition in the retail marketplace, and the principle of dual entitlement as a community standard of fairness in pricing.

The influence of multi-channel pricing strategy on price fairness and customer confusion

ABSTRACTMulti-channel retailers face the challenge of coordinating marketing variables across their channels. In this respect, one of the main issues arising is whether to differentiate or integrate prices. Our study examines the impact of three multi-channel price differentiation instruments on perceived price fairness, customer confusion, and their consequences. In a scenario-based online experiment, we use a 2 x 2 × 2 between-subjects design and manipulate product price differentiation, online promotion and online shipping fees. The results indicate that price differentiation has an impact on fairness evaluations and customer confusion. Product price differentiation and online promotion are perceived as more unfair and lead to more confusion than price parity. Price fairness perceptions of shipping fees depend on product price differentiation. Customers perceive shipping fees as fairer than no shipping fees when prices are cheaper online but perceive shipping fees as less fair when prices are integrated. These results suggest that customers expect a consistent consideration of channel cost advantages and disadvantages and that shipping fees might serve as a cue for customers to consider the retailer’s channel costs. We further show that price fairness and customer confusion mediate effects of pricing instruments (in particular online promotion) on attitudinal and behavioral consequences.

스키리조트 가격 공정성 인식이 기업신뢰와 구매행동 간의 관계분석

스키리조트 가격 공정성 인식이 기업신뢰와 구매행동 간의 관계분석

Factors Influencing Indonesian Customer Satisfaction and Customer Loyalty in Local Fast-Food Restaurant

This paper aims to analyze the influence of customer satisfaction and customer loyalty toward the local fast food restaurant in Indonesia. The variables involved in this study were perceived service quality, perceived product quality, perceived price fairness, customer satisfaction, and customer loyalty. Samples of this study were customers of the local fast food restaurant in Yogyakarta. Quantitative method is used to analyze the relationships within variables. This research examined 200 respondents by spreading the online questionnaires that were analyzed by using Structural Equation Model method. To collect the data, this study used convenience sampling method. The results show that perceived service quality, perceived product quality, and perceived price fairness had a positive and significant influence on customer satisfaction. Also, perceived service quality, perceived product quality, and perceived price fairness had a positive and significant influence on customer loyalty. Finally, customer satisfaction has a positive and significant influence on customer loyalty. Perceived price fairness was the highest influence on Indonesian consumers for being loyal to the local fast food restaurants.

커피전문점의 브랜드이미지가 가격공정성 지각 및 관계지속의도에 미치는 영향

브랜드 관리에서 이미지 부문은 소비자들에게 특정한 인상과 느낌을 심어준다는 점에서 중요한 영역이다. 호의적인 브랜드이미지는 소비자의 지출과 재방문에 긍정적인 영향을 미치기 때문이다. 이에 경영진에서는 브랜드이미지를 가격책정과 충성고객 확보 측면에서 접근하고 관리해나갈 필요가 있다. 따라서 본 연구에서는 커피전문점의 브랜드이미지를 선행변수로 한 가격공정성 지각과 관계지속의도 간의 영향관계를 분석하였다. 그리고 결과를 바탕으로 소비자의 가격 저항을 최소화하고 그들의 지속적인 이용을 유도해낼 수 있는 전략 방안을 제안하고자 하였다. 이를 위해 2018년 6월 1일부터 7월 19일까지 커피전문점 이용객을 대상으로 온 · 오프라인 방식의 설문조사를 실시하였다. 그리고 최종 유효표본인 217부를 활용하여 실증분석을 하였으며 분석결과는 다음과 같다. 첫째, 인지적 이미지와 정서적 이미지로 구성된 커피전문점의 브랜드이미지가 소비자의 가격공정성 지각에 미치는 영향관계 분석에서 인지적 이미지만이 가격공정성 지각에 유의한 정(+)의 영향(.462)을 미치는 것으로 나타났다. 둘째, 가격공정성 지각이 관계지속의도에 미치는 영향관계를 분석한 결과 유의한 정(+)의 영향(.524)을 미치는 것으로 나타났다. 셋째, 커피전문점의 브랜드이미지가 관계지속의도에 미치는 영향관계 분석에서 인지적 이미지(.375)가 정서적이미지(.124)보다 정(+)의 방향으로 더 많은 영향을 미치는 것으로 나타났다. 이러한 결과를 종합하면, 커피전문점의 브랜드이미지는 크게 인지적 이미지와 정서적 이미지로 나눌 수 있다. 그리고 여건상 두 가지 이미지를 동시에 충족시키는 것에 어려움이 있는 인지적 이미지에 상대적 우위를 두고 관리해나가는 것이 가격 면에서 소비자를 설득하는 것에 훨씬 유리할 뿐만 아니라 지속적인 이용 유도에도 효율적이라 할 것이다. 본 연구에서는 분석결과별로 시사점을 제시하였으며 연구의 한계점과 향후 연구과제에 대해서도 제안하였다.

Investigating relative impact of reference prices on customers’ price evaluation in absence of posted prices: a case of Pay-What-You-Want (PWYW) pricing

This study investigates customers’ evaluation of the offered price suggestion for a consumer durable sold under Pay-What-You-Want pricing. The relative use of internal reference price (IRP) and external reference price (ERP) is examined in customers’ price evaluation process. This study is a quantitative study employing a scenario-based approach to obtain responses from the participants. 208 students participated in between-subject factorial experiment design. ANCOVA and simple effects analysis were used to assess customers’ responses to measures like price assessment and perceived price fairness. Results show that respondents exhibit the relatively greater influence of ERP than IRP in the price evaluation process. This varying effect was attributed to two key factors, accessibility of the information and diagnostic perceptions.

Putting a Price on User Innovation: How Consumer Participation Can Decrease Perceived Price Fairness

Consumer participation allows firms and consumers to innovate through the joint creation of products—a rapidly growing and dramatic shift in the way consumers acquire products in the marketplace. Building on past consumer participation and behavioral pricing research, we investigate how consumer participation affects price perceptions and the process by which these perceptions form. While past research suggests consumer participation increases price perceptions, we argue it decreases price perceptions when participation costs are salient. Across four studies, we show that participation costs are not always salient prior to purchase (e.g., when psychological distance and self-efficacy are high) but that managerial interventions intended to support consumer participation—including advertising, product trial, and product support—can inadvertently backfire by making participation costs salient and reducing price perceptions for participation-based products. Thus, we provide evidence of a potential drawback of consumer participation, which has pricing and competition implications.

When do high prices lead to purchase intention? Testing two layers of moderation effects

Purpose Most marketing practices assume that consumers will buy when prices are low. This assumption, however, may not always hold true. Employing equity theory and Veblen’s theory of the leisure class, this study tested two moderating effects to ascertain the relationship between perceived price and purchase intention. The purpose of this paper is threefold: first, to examine the relationship between perceived price and willingness to purchase; second, to discover the effects of two moderators (perceived price fairness and vanity) on this relationship; and third, to compare how these moderating effects differ by consumers’ brand familiarity. Design/methodology/approach A total of 287 usable data sets were collected from college students in the southeastern region of the USA. Findings The findings showed no negative relationship between perceived price and willingness to purchase. Only perceived price fairness was found to moderate the perceived price–purchase intention relationship. Furthermore, the moderating effect of price fairness was only confirmed in the high brand familiarity group, while the moderating effect of vanity was only confirmed in the low brand familiarity group. Research limitations/implications Generalization of the findings is cautioned because findings may vary by demographic backgrounds. Practical implications Since purchase intention increases when price is fair even though price is high, marketers should put efforts into promoting and creating the perception of fair price of their products and brands. Originality/value This study extends price perception research by incorporating two theories (equity theory and Veblen’s theory of the leisure class) that help further elaborate the relationship between perceived price and willingness to purchase.

How consumers respond to social norms: an evidence from pay-what-you-want (PWYW) pricing

PurposeThis paper aims to investigate consumer behaviour in response to social norms under pay-what-you-want (PWYW) pricing. Specifically, it explores the critical role of social norms such as norm priming and consumer prior trust in the retailer on consumers’ perceived price fairness, trust, willingness to pay, purchase intentions and intentions to spread negative word of mouth about the retailer.Design/methodology/approachData on dependent measures were collected through the scenario-based online experimental approach and assessed using MANOVA analysis.FindingsResults confirm the significance of norms by indicating the critical role of norm belief on consumer responses. Also, increasing the salience of norms by priming them usually intensifies negative behaviour, and pre-existing trust in the retailer serves as an imperfect cushion against consumer negative reactions to norm violation, but this effect is observed to be decreasing with increase in prior trust.Research limitations/implicationsFurther research should consider the contextual (time, place, media) influences and assumptions to increase the generalizability of the findings.Originality/valueTo the best of the authors’ knowledge, this is the first paper to explicitly examine the effects of social-norm compliance by sellers on consumer behaviour in the context of PWYW pricing.