A note on fairness and personalised pricing

Nir Vulkan and Yotam Shem-Tov

Economics Letters, 2015, vol. 136, issue C, 179-183

Abstract: Since the seminal papers of Fehr and Schmidt (1999) and Bolton and Ockenfels (2000), fairness has become an important discussion point in economics. Is it unfair that different people pay different prices for the same good or service? We provide what we believe to be a novel approach: We let normal everyday consumers play the role of sellers who have access to consumers’ data (and willingness to pay). A strong finding of behaviour in this setup is that subjects charge a fixed percentage (approximately 64%) of the willingness to pay from each of their subjects, leading to a fair, whilst uneven, distribution of prices. Interesting, this 64% price level does not change when we vary the number of sellers competing in the market.

Keywords: Market design; Pricing; Fair Pricing (search for similar items in EconPapers)
JEL-codes: D47 L11 L26 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:136:y:2015:i:c:p:179-183

DOI: 10.1016/j.econlet.2015.09.012

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