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Perception of the fairness of pricing


  • 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)


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.

Suggested Citation

  • Stéphanie Souche & Charles Raux, 2006. "Perception of the fairness of pricing," Post-Print halshs-00109055, HAL.
  • Handle: RePEc:hal:journl:halshs-00109055
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    References listed on IDEAS

    1. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
    2. Glazer, Amihai & Lave, Charles, 1996. "Regulation by Prices and by Command," Journal of Regulatory Economics, Springer, vol. 9(2), pages 191-197, March.
    3. Howard Kunreuther & Doug Easterling, 1996. "The role of compensation in siting hazardous facilities," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 601-622.
    4. Taylor, Grant A. & Tsui, Kevin K. K. & Zhu, Lijing, 2003. "Lottery or waiting-line auction?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1313-1334, May.
    5. Bruno S. Frey & Felix Oberholzer-Gee, 1996. "Fair siting procedures: An empirical analysis of their importance and characteristics," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(3), pages 353-376.
    6. 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.
    7. Charles Raux & Stéphanie Souche, 2004. "The Acceptability of Urban Road Pricing: A Theoretical Analysis Applied to Experience in Lyon," Journal of Transport Economics and Policy, University of Bath, vol. 38(2), pages 191-215, May.
    8. Vaidyanathan, Rajiv & Aggarwal, Praveen, 2003. "Who is the fairest of them all? An attributional approach to price fairness perceptions," Journal of Business Research, Elsevier, vol. 56(6), pages 453-463, June.
    9. Frey, Bruno S & Oberholzer-Gee, Felix & Eichenberger, Reiner, 1996. "The Old Lady Visits Your Backyard: A Tale of Morals and Markets," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1297-1313, December.
    10. Sah, Raaj Kumar, 1987. "Queues, Rations, and Market: Comparisons of Outcomes for the Poor and the Rich," American Economic Review, American Economic Association, vol. 77(1), pages 69-77, March.
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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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