Fundamentals of Price Fairness – Review and Avenues for Future Research

Abstract

Zusammenfassung Aufgrund einer hohen Dynamik des Forschungsbereichs ist es das Ziel des vorliegenden Beitrags, eine gesamthafte Bestandsaufnahme der wissenschaftlichen Literatur zum Thema Preisfairness vorzunehmen. Aufbauend auf den theoretischen und begrifflichen Grundlagen der Preisfairness werden vier konzeptionelle und 63 empirische Arbeiten analysiert. Die analysierten Arbeiten werden danach differenziert, ob die Preisfairness hinsichtlich ihrer Determinanten oder Konsequenzen erforscht wurde. Es erfolgt eine Diskussion konvergierender und, falls vorhanden, divergierender Befunde. Auf Basis der analysierten Literatur werden Ansätze für zukünftige Forschungsarbeiten identifiziert und priorisiert. Schlüsselwörter Preisfairness · Behavioral Pricing · Preismanagement JEL Klassifikationen M31 Fundamentals of Price Fairness -Review and Avenues for Future ResearchAbstract Because of the high dynamic of price fairness research it is the aim of the paper at hand to provide an overview of the current state of research on this topic. Based on the theoretical and conceptual foundations of price fairness, four conceptual and 63 empirical studies are analyzed. A division into determinants and consequences of perceived price fairness and a discussion of converging and, if applicable, M. Fassnacht ( ) Lehrstuhl für BWL, insbesondere Marketing und Handel (Otto Beisheim-Stiftungslehrstuhl), WHU -296 M. Fassnacht, J. Mahadevan diverging results are included as well. Based on this analysis of the existing literature, avenues for further research are identified and prioritized.

Perceived Price Fairness in Pay-What-You-Want: A Multi-Country Study

“…Until today, there is no unique definition of PPF [5] [31]. However, what all existing definitions have in common is that they are based on one or more of the three socio-psychological theories: The dual entitlement principle, the equity theory, and the theory of cognitive dissonance.…”

“…The dual entitlement principle by Kahneman, Knetsch, and Thaler [32] [33] is a theory of procedural justice that points to the question of whether or not price-determining processes refer to general standards and rules. This principle is mainly used to assess price increases [5]. According to the equity theory, distributive justice is realised when the rewards minus the costs divided by the investments of one party are equal to the rewards minus the costs divided by the investments of the other party [34] [35] [36].…”

“…According to the equity theory, distributive justice is realised when the rewards minus the costs divided by the investments of one party are equal to the rewards minus the costs divided by the investments of the other party [34] [35] [36]. 2 Following this theory, the buyer's price fairness perception depends on his perceived input-output ratio compared to all involved reference points such as previous purchases and other buyers [5]. Festinger's [37] theory of cognitive dissonance can explain buyers' reaction to perceived price unfairness.…”

“…The theory assumes that people seek internal consistency and that disparity in a buyer's perceived input-output ratio causes cognitive dissonances. The massive protests by existing customers in the previous example of Amazon illustrate people's reactions to such cognitive dissonances, trying to restore their cognitive balance again [5].…”

“…Perceived price unfairness, however, can cause customers to feel the need to protect themselves from future unfair treatment, via complaints, return of goods, and negative word of mouth. Perceived price unfairness may also lead to sanctions by the customer, such as switching to a competing company or retaliation in court [5] [6].…”