Perceived price fairness of dynamic pricing

Abstract

Purpose -This study aims to adopt illusion of control and lateral consumer relationship in order to investigate their effects on price fairness in online auction and group buying context. These two variables have been known to have strong influences in fairness perception on consumers' decision-making processes and outcomes. Design/methodology/approach -The authors draw their conceptual foundations from previous studies, supplement this from the electronic commerce literature, and test the model through laboratory experiments.Findings -The study demonstrates that consumers' perception on illusion control in price determination and advantageous lateral consumer relationship significantly affect price fairness perception in both the online auction and group buying environments.Research limitations/implications -The findings are expected to provide researchers with useful insights to conduct future studies on uncovering the nomological networks associated with price fairness perception. Practical implications -The findings are expected to help managers develop better pricing strategies and design effective dynamic pricing mechanisms. Originality/value -The paper provides the first integrated perspective on the human decision processes in the dynamic pricing environment in electronic markets.

Price fairness perceptions and hotel customers’ behavioral intentions

“…Familiarity with revenue management pricing practices has been shown to influence customers' perceptions of pricing (Noone and Mattila, 2009;Wirtz and Kimes, 2007). As customers become more familiar with and exposed to the pricing practices of hotels, their perceptions of the fairness of that pricing approach increases (Heo and Lee, 2011). These findings further support the work of Taylor and Kimes (2010) as well as theories about customer loyalty, that is, loyal customers are less likely to switch and are less price sensitive.…”

The effect of perceived price fairness through satisfaction and loyalty on international tourists’ price acceptance of Islamic-Iranian art products

“…To manage pricing decisions effectively, the marketer must be able to understand both the economic and the psychological responses to various prices and price changes. Perceived price fairness has been identified as one psychological factor that exerts an important influence on consumers' reactions to prices, such as satisfaction, loyalty and price acceptance (Padula and Busacca, 2005;Herrmann et al, 2007;Martin-Consuegra et al, 2007;McMullan and Gilmore, 2008;Beldona and Kwansa, 2008;Xia et al, 2010;Lee et al, 2011;Wu, 2011). Perceived price fairness is a multi-dimensional psychological factor that has an important effect on a customer's reaction towards price.…”

Consumer Experiences of Accommodation Deals Purchased via Social Coupon Promotions: An Australian Perspective

“…In addition to the number of coupons purchased, other important measures of coupon success should include the extent to which customers are satisfied with the deal and the likelihood they will repurchase (S. Lee, Abdou & Assion, 2011). In general, these measures have largely been unexplored.…”

“…Given the deep discounts, which are typically more than 50%, or high value-adds associated with social coupon purchases, there has been some suggestion that consumers of these deals are bound to view the price paid as representing high value and, hence, consider the deal to be a fair transaction subsequently leading to increased purchase intention (S. Lee, Abdou & Assion, 2011). What is not known, however, is whether the act of purchasing via a heavily discounted deal has any influence on buyers' expectations regarding the quality of the product or service they will ultimately receive.…”