Price Fairness and Strategic Obfuscation

Allender, William J.; Liaukonytė, Jūra; Nasser, Sherif; Richards, Timothy J.

doi:10.1287/mksc.2020.1244

Cited by 40 publications

(15 citation statements)

References 47 publications

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“…Moreover, it would counterbalance increasing retailers’ obfuscated pricing strategy. This is based on personalised customer-dependent price setting that prevents consumers observing prices offered to other consumers [ 69 ]. This pricing strategy practice strengthens consumers’ inability to distinguish misleading pricing strategies [ 70 ], and limits consumers’ capability to define its own reference prices and definition of what is a fair price [ 30 , 31 , 32 , 33 , 34 ].…”

Section: Discussionmentioning

confidence: 99%

Price Fairness of Processed Tomato Agro-Food Chain: The Italian Consumers’ Perception Perspective

Samoggia

Grillini

Prete

2021

Foods

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Food consumers are increasingly searching for emotions and values when purchasing and consuming food. They search for products that ensure social and environmental sustainability, in addition to more common extrinsic product attributes, such as price, packaging, origin, and brand. In particular, there is increasing interest towards product price fairness. The current study aims at exploring consumers’ perception and understanding of price fairness, focusing on the processed tomato products agro-food chain. The study interviewed 832 people. Data were collected through an online questionnaire with the support of Qualtrics software, and data elaboration was carried out with Statistical Package for Social Science (SPSS). The elaboration includes an Exploratory Factor Analysis (EFA) to identify existing latent factors in the consumers’ perception of enabling agro-food system elements influencing farmers’ reception of fair prices. Then, factor mean values were cross-analysed with socio-economic characteristics and processed tomato consumption habits with Analysis of Variance (ANOVA). Results support the idea that consumers are limitedly aware of the processed tomato agro-food chain dynamics and consider farmers as the most unfairly remunerated partner. Women and frequently purchasing consumers of processed tomato products believe farmers should be treated more fairly. There is a difference between what consumers perceive as fair price distribution and actual price distribution among processed tomato chain actors. Further studies may focus on how fairness attribute impacts on consumer purchasing behaviour.

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Section: Discussionmentioning

confidence: 99%

Price Fairness of Processed Tomato Agro-Food Chain: The Italian Consumers’ Perception Perspective

Samoggia

Grillini

Prete

2021

Foods

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“…There has been extensive research specifically focused on personalized/online pricing. For instance, research by Vulkan and Shem-Tov (2015), Richards et al (2016) and Allender et al (2021) have a cautionary warning for personalized pricing strategy: comparative payment is an important determinant of perception of fairness. If the consumer discovers that she has paid more for the same product/service than another consumer, then the said consumer perceives the price to be unfair and purchase probabilities decline.…”

Section: Integrated Review Analysis and Synthesismentioning

confidence: 99%

“…The theoretical analyses support this finding. Obfuscation can arise as an equilibrium outcome, “even if consumers are aware of the seller’s strategic behavior and are able to update their beliefs and expectations about the prices offered to their peers accordingly” (Allender et al , 2021). The discounted profits are higher in behavior-based pricing (BBP) when there is no customer recognition.…”

Section: Conclusion and Managerial Insightsmentioning

confidence: 99%

Behavioral response to online pricing: empirical and managerial insights

Kalyanaram

Saini

Mony³

et al. 2022

JIBR

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Purpose Pricing is always a fundamental marketing element. In the digital marketing/e-commerce context, there are two universal phenomena: desire to micro-segment and customize, and the adverse reaction upon unfair perception of price. A third related question is how should firms consider price increases and decreases? Specifically, this paper aims to address the following three research and practice questions: What are the theoretical underpinnings of perception of fairness/unfairness in pricing, and what are the findings? What are the theoretical underpinnings of response to price increases and decreases? What should be online pricing strategy, consistent with the findings on (un)fairness perception of pricing and response to price increases and decreases? Design/methodology/approach The present approach is integrative review and critical analyses, and synthesis. The review dates back to 1960s, and is inter-disciplinary, including apposite findings in behavioral science, economics, marketing and operations management/research. The authors search for insights with significant empirical support to address these questions. Findings Perception of unfair price impacts consumer choice, probability of purchase, intent to buy and attitude to product/service/firm adversely. Consumers react differently to perceived unfair and fair prices. Consumers react more strongly and negatively to perceived unfair prices (compared to prices perceived to be fair) in their intent to buy and other related metrics. Consumers react differently to price increases and price decreases relative to the reference price. Consumers react more strongly to price increases than to price decreases. There is substantial heterogeneity in the magnitude of loss-aversion effect, depending on the product/service category and estimation methods. Originality/value The authors review and discuss potential viable pricing strategies. Based on the generalizable findings, this study provides actionable insights to managers for pricing in digital marketing context. Also, the authors provide useful directions for future research.

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“…Furthermore, when a consumer perceives a price change from one transaction to another, the similarity of the two transactions influences price fairness perceptions, along with the reasons for a certain price, previous similar interactions between the same actors, and beliefs of sellers' practices 3 https://www.independent.co.uk/life-style/marks-spencer-hand-sanitiser-price-costcoronavirus-pandemic-a9521776.html | 1373 in general (Xia et al, 2004). Consumers also have fairness concerns pertaining to the practice of personalized pricing (Allender et al, 2021); however, when consumers knowingly allow a company to track their online behavior via cookies, they attribute the cause of the price change to themselves, and thus perceive a price increase as fairer (Schmidt et al, 2020).…”

Section: Conceptual Context: Perceived Csr Engagement and Price Changesmentioning

confidence: 99%

Corporate social responsibility and perceived fairness of price increases

Sipilä

Alavi

Edinger‐Schons

et al. 2022

Psychology and Marketing

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Consumers care about the fairness of companies both in terms of corporate social responsibility (CSR) engagement and the fairness of prices. However, the interplay between these domains is not yet well understood. Therefore, this study examines how consumers’ perceptions of CSR engagement affect their perceived price fairness following a price increase. Drawing on cue‐utilization and expectancy disconfirmation theory, the authors propose that perceived CSR engagement exacerbates the negative effect of a price increase on perceived price fairness, because perceived CSR engagement increases consumers’ price fairness expectations which are violated through price increases. These propositions are tested in three experimental studies with samples consisting of approximately 3000 customers of a global furniture manufacturer and retailer (Study 1), as well as participants acquired through a self‐administered online consumer panel (Study 2) and Prolific (Study 3). The experiments yield support for the hypothesized effects and reveal CSR skepticism as a critical boundary condition. The findings extend existing literature on the effects of perceived CSR engagement and pricing on consumer reactions by examining the role of perceived CSR engagement in shaping consumer reactions to price increases and by establishing consumers’ price fairness expectations as the central psychological mechanism.

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Price Fairness and Strategic Obfuscation

Abstract: Personalized prices affect fairness concerns, and firms have incentive to invest in technology that obfuscates prices and mitigates consumers’ fairness concerns.

Cited by 40 publications

References 47 publications

Price Fairness of Processed Tomato Agro-Food Chain: The Italian Consumers’ Perception Perspective

Price Fairness of Processed Tomato Agro-Food Chain: The Italian Consumers’ Perception Perspective

Behavioral response to online pricing: empirical and managerial insights

Corporate social responsibility and perceived fairness of price increases

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