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Price Gouging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic

Author

Listed:
  • Avichai Snir

    (Bar-Ilan University [Israël])

  • Daniel Levy

    (RCEA - Rimini Center for Economic Analysis, Emory University [Atlanta, GA], Bar-Ilan University [Israël])

  • Dudi Levy

    (Bar-Ilan University [Israël])

  • Haipeng Allan Chen

    (University of Iowa [Iowa City])

Abstract

We report the results of surveys we conducted in the US and Israel in 2020, a time when many prices increased following the spread of the COVID-19 pandemic. To assess respondents' fairness perceptions of price increases, we focus on goods whose prices have increased during the pandemic, including some essential goods. Consistent with the principle of dual entitlement, we find that respondents perceive price increases as fairer if they are due to cost shocks than if they are due to demand shocks. However, we also find large differences across the two populations, as well as across goods.

Suggested Citation

  • Avichai Snir & Daniel Levy & Dudi Levy & Haipeng Allan Chen, 2025. "Price Gouging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic," Post-Print hal-04854450, HAL.
    • Handle: RePEc:hal:journl:hal-04854450
    Note: View the original document on HAL open archive server: https://hal.science/hal-04854450v1
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    References listed on IDEAS

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    1. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination in a Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 351-377.
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    3. 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.
    4. Bolton, Lisa E & Warlop, Luk & Alba, Joseph W, 2003. "Consumer Perceptions of Price (Un)Fairness," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(4), pages 474-491, March.
    Full references (including those not matched with items on IDEAS)

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