Article
Environmental Studies
Sungwoo Choi, Myungkeun Song, Luo Jing
Summary: Informing customers that pricing is determined by algorithms can reduce their perceptions of unfairness in price discrimination, especially when the algorithm is less human-like. This effect is observed not only when customers directly experience price discrimination, but also when they obtain this information from other channels.
TOURISM MANAGEMENT
(2023)
Article
Business
Alisa Keller, Mila Vogelsang, Dirk Totzek
Summary: Dynamic pricing has the potential to increase retailers' profits, but it also risks negative customer reactions. This study finds that customers react negatively to dynamic pricing due to norm violation, but this can be mitigated by displaying prices as high discounts. Additionally, customers focus on the general pricing process when evaluating specific transactions in a dynamic pricing context, highlighting the importance of distributive and procedural fairness.
JOURNAL OF BUSINESS RESEARCH
(2022)
Article
Ethics
Jeffrey Moriarty
Summary: Online retailers are using data and computing technologies to personalize prices, potentially leading to unfair competition for social surplus. The author suggests that online retailers should either disclose personalized pricing or stop the practice.
ETHICS AND INFORMATION TECHNOLOGY
(2021)
Article
Business
Robin Pade, Sven Feurer
Summary: Personalized pricing is an effective method for firms to increase profits, but it is often perceived as unfair by consumers. This research demonstrates that consumer nostalgia can mitigate the negative perceptions of personalized pricing.
JOURNAL OF BUSINESS RESEARCH
(2022)
Article
Business
William J. Allender, Jura Liaukonyte, Sherif Nasser, Timothy J. Richards
Summary: This study examines the profitability conditions for firms using price obfuscation, and the impact of price obfuscation on consumer fairness concerns, consumer demand, and equilibrium pricing strategies. Findings suggest that obfuscation can effectively reduce peer-induced fairness concerns and increase sellers' pricing power.
Article
Hospitality, Leisure, Sport & Tourism
Yixing (Lisa) Gao, Basak Denizci Guillet, Peihao Wang
Summary: Traditional room pricing and attribute-based room pricing have similar effects on consumer attitudes and visit intentions before sales; however, attribute-based room pricing leads to more favorable outcomes after sales.
INTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT
(2021)
Article
Business
Gerrit Hufnagel, Manfred Schwaiger, Louisa Weritz
Summary: This paper presents an empirical analysis of the consequences of price (un)fairness perceptions in personalized pricing based on individual consumer characteristics or previous purchase behavior. The research reveals negative attitudinal and behavioral reactions to personalized pricing for both favored and disadvantaged customers, mediated by perceptions of price fairness. The study also confirms consumers' aversion to personalized pricing through a second study using a within-subject design. Furthermore, the evaluation of consumers' responses to various levels of information sensitivity in personalized pricing mechanisms uncovers a general refusal of personalized pricing approaches regardless of the underlying personal data.
JOURNAL OF BUSINESS RESEARCH
(2022)
Article
Management
Yu Wang, Minqiang Li, Haiyang Feng, Nan Feng
Summary: With the prevalence of subscription service model, firms can continuously improve their service quality and implement behavior-based price discrimination. The choices of pricing strategies are influenced by firms' asymmetric capability to improve their service quality. The interests of firms, social planner, and consumers are not always aligned.
OMEGA-INTERNATIONAL JOURNAL OF MANAGEMENT SCIENCE
(2023)
Article
Management
Jose Correa, Dana Pizarro, Gustavo J. Vulcano
Summary: In this dynamic pricing problem, a firm aims to maximize expected revenue by selling one item to a buyer. The firm determines a price function over an infinite horizon. The buyer, who has a private value for the item, strategizes over the timing of the purchase to maximize expected utility. The value of the seller's ability to observe the buyer's arrival time in terms of expected revenue is analyzed.
MANAGEMENT SCIENCE
(2023)
Article
Management
Maxime C. Cohen, Adam N. Elmachtoub, Xiao Lei
Summary: This paper examines the problem of setting prices for different groups under fairness constraints in the context of price discrimination strategies. The study finds that satisfying multiple fairness constraints is impossible even under simple settings. Analyzing the pricing strategy of a profit-maximizing seller, the authors show that moderate price fairness can increase social welfare, but excessive price fairness may result in lower welfare compared to no fairness. Additionally, fairness in demand or consumer surplus always decreases social welfare, while fairness in no-purchase valuation always increases social welfare.
MANAGEMENT SCIENCE
(2022)
Article
Management
Amir Ajorlou, Ali Jadbabaie
Summary: This paper studies sales-based rebate mechanisms as a tool for implementing price discrimination among buyers with different valuations. The seller charges a fixed price at the time of purchase, contingent on a rebate based on the sales volume. The price and rebate are kept uniform across all buyers, allowing for effective price discrimination. The paper uses game theory and variational optimization to analyze the mechanisms and proposes two easy-to-implement monotone mechanisms that perform well compared to the optimal mechanism.
MANAGEMENT SCIENCE
(2023)
Article
Business
Mona Hageboelling, Barbara Seegebarth, David M. Woisetschlaeger
Summary: The study found that tactical termination is a specific type of customer defection behavior, mainly influenced by social influences, price fairness, and interactional fairness.
JOURNAL OF BUSINESS RESEARCH
(2021)
Article
Business
Marco Alderighi, Consuelo R. Nava, Matteo Calabrese, Jean-Marc Christille, Chiara B. Salvemini
Summary: The extensive use of online travel agencies has increased the number of consumers who directly experience and evaluate how hotels implement dynamic pricing. Research has found that dynamic pricing has a negative effect on price fairness, with consumers being more sensitive to price differences among weeks of stay and room types.
JOURNAL OF BUSINESS RESEARCH
(2022)
Article
Psychology, Multidisciplinary
Zhiyan Wu, Yuan Yang, Jiahui Zhao, Youqing Wu
Summary: This paper investigates the impact of algorithmic price discrimination on consumers' perceived betrayal. The findings suggest that increased algorithmic price discrimination leads to higher perceived betrayal and lower perceived price fairness among consumers. However, higher perceived ease of use of online retailers mitigates the effect of algorithmic price discrimination on perceived betrayal.
FRONTIERS IN PSYCHOLOGY
(2022)
Article
Management
Monire Jalili, Michael S. Pangburn
Summary: Retailers often incentivize consumers to purchase products through rewards programs, with future-credit promotions generally advantageous for the retailer. Delayed discounts can broaden rational shopping behaviors and segmentation, and while they typically offer higher discount levels, they can also generate higher expected profits. This study establishes a theoretical basis for the prevalence of rewards programs in retail, proving the effectiveness of delayed-reward promotion structures compared to immediate discounts.