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Perception of the fairness of pricing

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  • Stéphanie Souche

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

  • Charles Raux

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

Abstract

Regulation by means of price in order to remove excess demand is generally perceived as being unfair. This paper empirically tests different principles of regulation including lotteries, rationing, a moral rule and compensation.We start from the postulate that the perception of the fairness of a urban road pricing policy is important for a successful implementation. This perception is analysed through the results of an attitudinal survey held in Lyons area in 2003 (N 400). We confirm that peak-period pricing as a means of limiting demand is overwhelmingly rejected. Administrative allocation and lotteries are also rejected. The reference transaction can also lead to rejection of waiting line. Price compensation is overwhelmingly considered to be fair and the right to this is demanded both from public or private sector monopoly: it is possible therefore to reinstate pricing in the form of compensation.Those surveyed express rather definite preferences for some principles of regulation (moral rule, compensation) to the detriment of pricing or even the administrative or traditional regulation (queuing). Ways of unfreezing the situation are identified, who could be exploited in order to form coalitions likely to support this kind of policy. Finally, certain dimensions of the equity are revealed through the analysis of the survey.

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  • Stéphanie Souche & Charles Raux, 2006. "Perception of the fairness of pricing," Post-Print halshs-00109055, HAL.
    • Handle: RePEc:hal:journl:halshs-00109055
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00109055
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    References listed on IDEAS

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    Cited by:

    1. Darryl Biggar, 2010. "Fairness in Public-utility Regulation: A Theory," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 17(1), pages 5-32.

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