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Pricing Fairness in a Pandemic: Navigating Unintended Changes to Value or Cost

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  • Elizabeth M. S. Friedman
  • Olivier Toubia

Abstract

The recent pandemic has caused many businesses to alter their offerings, at times providing inferior value to their customers or incurring higher costs. Many classes moved online, leading to a lower-value offering without significant cost reductions, and many firms adopted costly hygiene measures, such as stringent cleaning or reducing capacity to maintain social distancing. This article explores consumers’ fairness perceptions regarding pricing decisions made in response to unique scenarios caused by the pandemic. We present three key findings: (i) maintaining prices following a product downgrade is viewed as less fair than maintaining prices following an equivalent decrease in costs; (ii) price decreases following a product downgrade are viewed as more fair when positioned as passing on cost savings rather than making up for decreased value; and (iii) price increases due to hygiene measures are perceived as more fair when they result from direct (compared with indirect) cost changes.

Suggested Citation

  • Elizabeth M. S. Friedman & Olivier Toubia, 2022. "Pricing Fairness in a Pandemic: Navigating Unintended Changes to Value or Cost," Journal of the Association for Consumer Research, University of Chicago Press, vol. 7(1), pages 89-97.
    • Handle: RePEc:ucp:jacres:doi:10.1086/711850
    DOI: 10.1086/711850
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    Cited by:

    1. Ioannis Evangelidis, 2024. "Frontiers: Shrinkflation Aversion: When and Why Product Size Decreases Are Seen as More Unfair than Equivalent Price Increases," Marketing Science, INFORMS, vol. 43(2), pages 280-288, March.
    2. David Chavanne & Zak Danz & Jitu Dribssa & Rachel Powell & Matthew Sambor, 2022. "Context and the Perceived Fairness of Price Increases Coming out of COVID‐19," Social Science Quarterly, Southwestern Social Science Association, vol. 103(1), pages 55-68, January.
    3. Uzma Khan & Alexander DePaoli, 2024. "Brand loyalty in the face of stockouts," Journal of the Academy of Marketing Science, Springer, vol. 52(1), pages 44-74, January.

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