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Is a good deal always fair? Examining the concepts of transaction value and price fairness

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  • Xia, Lan
  • Monroe, Kent B.

Abstract

Previous research has shown that if consumers are aware that they are paying more than another customer for a similar transaction, then they may perceive the price to be unfair. A concept closely related to fairness is transaction value, defined as consumers' perceptions of the psychological satisfaction or pleasure from taking advantage of a price deal. In this research, we conceptualize that although consumers' perceptions of price fairness and transaction value share many similarities, nevertheless there are also important differences. Using three studies, we empirically examine these differences. We show that although a "bad deal" is typically perceived to be an unfair price, a "good deal" is not necessarily perceived to be the fairest price.

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  • Xia, Lan & Monroe, Kent B., 2010. "Is a good deal always fair? Examining the concepts of transaction value and price fairness," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 884-894, December.
    • Handle: RePEc:eee:joepsy:v:31:y:2010:i:6:p:884-894
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    1. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    2. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
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    2. Malc, Domen & Mumel, Damijan & Pisnik, Aleksandra, 2016. "Exploring price fairness perceptions and their influence on consumer behavior," Journal of Business Research, Elsevier, vol. 69(9), pages 3693-3697.
    3. Chen, Jing & Yu, Bo & Chen, Bintong & Liu, Zhuojun, 2023. "Lenient vs. stringent returns policies in the presence of fraudulent returns: The role of customers’ fairness perceptions," Omega, Elsevier, vol. 117(C).
    4. Xia, Lan & Kukar-Kinney, Monika, 2014. "For our valued customers only: Examining consumer responses to preferential treatment practices," Journal of Business Research, Elsevier, vol. 67(11), pages 2368-2375.
    5. Wamsler, Julia & Natter, Martin & Algesheimer, René, 2022. "Transitioning to dynamic prices: Should pricing authority remain with the company or be delegated to the service employees instead?," Journal of Business Research, Elsevier, vol. 139(C), pages 1476-1488.
    6. Alderighi, Marco & Nava, Consuelo R. & Calabrese, Matteo & Christille, Jean-Marc & Salvemini, Chiara B., 2022. "Consumer perception of price fairness and dynamic pricing: Evidence from Booking.com," Journal of Business Research, Elsevier, vol. 145(C), pages 769-783.
    7. Giuseppe Cappiello, 2012. "Fair play: il concetto di equit? nella prospettiva dello scambio di mercato," ECONOMIA E DIRITTO DEL TERZIARIO, FrancoAngeli Editore, vol. 2012(3), pages 337-355.
    8. Huang, Wen-Hsien & Shen, George C. & Liang, Che-Ling, 2019. "The effect of threshold free shipping policies on online shoppers' willingness to pay for shipping," Journal of Retailing and Consumer Services, Elsevier, vol. 48(C), pages 105-112.
    9. Azar, Ofer H., 2013. "Competitive strategy when consumers are affected by reference prices," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 327-340.
    10. Kuester, Sabine & Feurer, Sven & Schuhmacher, Monika C. & Reinartz, Dominik, 2015. "Comparing the incomparable? How consumers judge the price fairness of new products," International Journal of Research in Marketing, Elsevier, vol. 32(3), pages 272-283.
    11. Fernandes, Teresa & Calamote, Ana, 2016. "Unfairness in consumer services: Outcomes of differential treatment of new and existing clients," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 36-44.
    12. Isabella, Giuliana & Mazzon, José Afonso & Dimoka, Angelika, 2017. "Impacts of product type and representation type on the perception of justice and price fairness," Journal of Business Research, Elsevier, vol. 81(C), pages 203-211.

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