Improving unfairness perceptions of prices

Authors: Jen-Bor Huang; Huey-Pyng Shyu; Ching-Te Chang

Journal: Chia Da Management Review. Dec. 2005, 25(2): 1-26.

Keywords: Bundling; Eexplanation; Fairness;price

Abstract:
Many studies have examined the perceived unfairness of price increases and its consequences, but few works have examined methods of improving unfairness perceptions. This study examines two strategies managers can employ to improve perceived price unfairness, namely giving explanations and using bundled offers. A total of 686 subjects participated in a study with a 2 x 4 between-subject design to test the effects of the two strategies. The results of the study show that giving explanations and using bundled offers can mitigate unfairness perceptions derived from price hikes. Directions for future research also are discussed.