The effect of price communication on price unfairness perceptions
(A2023-114406)

AUTHORS

Anders Mathias Mamen, Kristiania University College

ABSTRACT

The effect of price communication on price unfairness perceptions Abstract Marketers who use peak load pricing can decide how to communicate their prices. If you have a high and a low price, should the low price be the standard price, and the high rush-hour-price be a price increase, or should it be the opposite way around? Two studies find that presenting high price as the standard price, and the low price as a price reduction, leads to less price unfairness perceptions. This is in line with the theory of loss-aversion, where loss and gain are relative, hence the relationship of loss-aversion and price unfairness is new. Pain of paying is tested as a moderator on the relationship. This relationship is found to be significant in the second study. In a peak load scenario with high and low prices, price communication influences consumer price unfairness perception, and the relationship seems to be moderated by consumers pain of paying. Keywords: Price Unfairness Track: Pricing & Promotions