Do Consumers Care about How Prices Are Set?

No ECO2008/03, Economics Working Papers from European University Institute

Abstract: Using a survey approach, we ask consumers to reveal their preferences over pricing schemes that may differ in terms of the average price of consumption, the amount of price variation, and the probability of being rationed. We find that consumers dislike pricing schemes that vary prices more but that they are willing to trade off price variation and rationing. Surprisingly, they are not willing to trade off an increase in price variation for a decrease in expected prices. We discuss the implications of these findings for firm pricing policies.

Keywords: Consumer demand; rationing; demand fluctuation; antagonism; fairness (search for similar items in EconPapers)
JEL-codes: A12 D01 D12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic and nep-mkt
Date: Written 2008
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Related works:
Working Paper: Do Consumers Care About How Prices Are Set? (2007)
Journal Article: Do Consumers Care about how Prices are Set? (2008)
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