Author
Listed:
- Liu Yang
(Business School, University of International, Business and Economics, Beijing, P. R. China)
- Yuanyuan Zheng
(Business School, University of International, Business and Economics, Beijing, P. R. China2Angers Joint Institute, Ningbo University, Ningbo, P. R. China)
- Jiasi Fan
(Business School, University of International, Business and Economics, Beijing, P. R. China)
- Shaozeng Dong
(School of Business, Jiangsu Ocean University, Lianyungang, P. R. China)
Abstract
The development of emerging technologies, such as advanced information system, social media, and blockchain, has significantly changed consumers’ behaviors in relation to online purchase. Having access to the historical price information, consumers are able to compare the current price with the historical prices and may raise fairness concerns in the comparison process. We investigate the impacts of consumers’ fairness concerns on retailers’ pricing strategies in a two-stage model. We show that when the retailer uses uniform pricing strategy, consumers’ fairness concerns induce the retailer to decrease product price. As a consequence, the market demand expands and the retailer’s profit reduces. When the retailer adopts multi-stage pricing strategy, we find that consumers’ fairness concerns are not always harmful to the retailer’s profit. Under certain conditions, the retailer can benefit from consumers’ fairness concerns. Particularly, the product price in the first period increases, but the price in the second period and the market demand could be increased or decreased, depending on the situations.
Suggested Citation
Liu Yang & Yuanyuan Zheng & Jiasi Fan & Shaozeng Dong, 2022.
"Online Pricing Strategy with Considering Consumers’ Fairness Concerns,"
Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 39(01), pages 1-23, February.
Handle:
RePEc:wsi:apjorx:v:39:y:2022:i:01:n:s0217595921400327
DOI: 10.1142/S0217595921400327
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