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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    1. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    2. Kelly L. Haws & William O. Bearden, 2006. "Dynamic Pricing and Consumer Fairness Perceptions," Journal of Consumer Research, Oxford University Press, vol. 33(3), pages 304-311, October.
    3. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    4. 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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    Cited by:

    1. 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.
    2. 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.
    3. Azar, Ofer H., 2013. "Competitive strategy when consumers are affected by reference prices," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 327-340.
    4. repec:eee:jbrese:v:81:y:2017:i:c:p:203-211 is not listed on IDEAS

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