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Perceptions of Price Fairness

An Empirical Research

Fontys University of Applied Sciences, Eindhoven, Netherlands, R.Gielissen{at}fontys.nl

Chris E. Dutilh

Unilever Benelux BV, Rotterdam, Netherlands, chris.dutilh{at}unilever.com

Johan J. Graafland

Tilburg University, Tilburg, Netherlands, j.j.graafland{at}uvt.nl

This article researches factors that influence price fairness judgments. The empirical literature suggests several factors: reference prices, the costs of the seller, a self-interest bias, and the perceived motive of sellers. Using a Dutch sample, we find empirical evidence that these factors significantly affect perceptions of fair prices. In addition, we find that the perceived fairness of prices is also influenced by other distributional concerns that are independent of the transaction. In particular, price increases are judged to be fairer if they benefit poor people or small organizations rather than rich people or big organizations.

Key Words: price fairness • inequality • reference pricing • cost base pricing

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