Evaluating price fairness in hedonic and co-created categories

Praveen Sugathan (praveens@iimk.ac)
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Praveen Sugathan: Indian Institute of Management Kozhikode

No 336, Working papers from Indian Institute of Management Kozhikode

Abstract: Since most of the consumer transaction are valued based on economic utility, prices and cost involved in transaction forms the important aspect of evaluating transactions. Price fairness literature evaluates the fairness of these transaction from the perspective of consumers. Most of the relevant research on price fairness are motivated by principle of dual entitlement (Kahneman et al 1986) which argues that in fairness perceptions are governed by the belief that firms are entitled to a reference profit and consumers are entitled to a reference price. Most of the literature on price fairness has been studying the fairness perceptions when status-quo is changed, for example increase in prices to take advantage surplus demand, or newly obtained monopoly power, or increase in costs. However, the literature has not looked in to price fairness perceptions related to the emerging categories of hedonic products or co-created products. Our research aims to contribute to such knowledge by explicating the price judgment mechanisms contextualized by theories related to these emerging categories.

Keywords: Price Fairness; Principle of Dual Entitlement; Hedonic categories; Co-created Categories (search for similar items in EconPapers)
Pages: 04 pages
Date: 2019-03
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