Does demand fall when customers perceive that prices are unfair? the case of premium pricing for large sizes

Marketing Science

Volumn 27, Issue 3, 2008, Pages 492-500

  Anderson, Eric T ^a   Simester, Duncan I ^b  

^a NORTHWESTERN UNIVERSITY   (United States)

^b MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

Author keywords

Experimental economics; Fairness; Price discrimination; Price promotion; Product line pricing

Indexed keywords

EID: 54149087536     PISSN: 07322399     EISSN: 1526548X     Source Type: Journal    
DOI: 10.1287/mksc.1070.0323     Document Type: Article

References (25)

1. Alba, J. W., S. Broniarczyk, T. Shimp, J. E. Urbany. 1994. The influence of prior beliefs, frequency cues, and magnitude cues on consumers' perceptions of comparative price data. J. Consumer Res. 21 219-235.
2. Anderson, E. T., D. I. Simester. 2003. Effects of $9 price endings on retail sales: Evidence from field experiments. Quant. Marketing Econom. 1(1) 93-110.
3. Barry, B., R. Oliver. 1996. Affect in dyadic negotiation: A model and propositions. Organ. Behav. Human Decision Processes 67 127-143.
4. Bies, R. J., T. M. Tripp, M. A. Neale. 1993. Procedural fairness and profit seeking: The perceived legitimacy of market exploitation. J. Behavioral Decision Making 6(December) 243-256.
5. Bolton, L., L. Warlop, J. W. Alba. 2003. Consumer perceptions of price (un)fairness. J. Consumer Res. 29(March) 474-491.
6. Briesch, R., L. Krishnamurthi, T. Mazumdar, S. P. Raj. 1997. A comparative analysis of reference price models. J. Consumer Res. 24(2) 202-214.
7. Buyukkurt, B. K. 1986. Integration of serially sampled price information: Modeling and some findings. J. Consumer Res. 13 357-373.
8. Campbell, M. C. 1999. Perceptions of price unfairness. J. Marketing Res. 36(May) 187-199.
9. Darke, P. R., J. L. Freedman. 1993. Deciding whether to seek a bargain: Effects of both amount and percentage off. J. Appl. Psych. 78(December) 960-965.
10. Dholakia, U. M., J. H. Jones, I. Simonson. 2005. The effect of explicit reference points on consumer choice and online bidding behavior. Marketing Sci. 24(2) 194-205.
11. Grewal, D., H. Marmorstein. 1994. Market price variation, perceived price variation, and consumers' price search decisions for durable goods. J. Consumer Res. 21(December) 453-460.
12. Janiszewski, C., D. Lichtenstin. 1999. A range theory account of price perception. J. Consumer Res. 25 353-368.
13. Kahneman, D., A. Tversky. 1984. Choices, values and frames. Amer. Psychologist 39 341-350.
14. Kahneman, D., J. L. Knetsch, R. H. Thaler. 1986a. Fairness and the assumptions of economics. J. Bus. 59(October) S285-S300.
15. Kahneman, D., J. L. Knetsch, R. H. Thaler. 1986b. Fairness as a constraint on profit seeking: Entitlements in the market. Amer. Econom. Rev. 76(September) 728-741.
16. Kambil, A., V. Agrawal. 2001. The new realities of dynamic pricing. Outlook 2 15-21.
17. Kimes, S. 2002. Perceived fairness of yield management. Cornell Hotel Restaurant Admin. Quart. 43(1) 21-30.
18. Lichtenstein, D. R., W. O. Bearden. 1989. Contextual influence on perceptions of merchant-supplied reference prices. J. Consumer Res. 16 55-66.
19. Lichtenstein, D. R., P. H. Bloch, W. C. Black. 1988. Correlates of price acceptability. J. Consumer Res. 15 243-252.
20. Martins, M., K. B. Monroe. 1994. Perceived price fairness: A new look at an old construct. C. T. Allen, D. R. John, eds. Advances in Consumer Research, Vol. 21. Association for Consumer Research, Provo, UT, 75-78.
21. Monroe, K. B. 1990. Pricing: Making Profitable Decisions. McGraw-Hill/Irwin, New York.
22. Novemsky, N., M. E. Schweitzer. 2004. What makes negotiators happy? The differential effects of internal and external social comparisons on negotiator satisfaction. Organ. Behav. Human Decision Processes. 95(2) 186-197.
23. Ordonez, L. D., T. Connolly, R. Coughlan. 2000. Multiple reference points in satisfaction and fairness assessment. J. Behavioral Decision-Making 13(3) 329-344.
24. Urbany, J. E., W. O. Bearden, D. C. Weilbaker. 1988. The effect of plausible and exaggerated reference prices on consumer perceptions and price search. J. Consumer Res. 15 95-110.
25. Xia, L., K. B. Monroe, J. L. Cox. 2004. The price is unfair! A conceptual framework of price fairness perceptions. J. Marketing 68(4) 1-15.