Online Pricing Strategy with Considering Consumers’ Fairness Concerns

Liu Yang (), Yuanyuan Zheng, Jiasi Fan () and Shaozeng Dong
Additional contact information
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

Asia-Pacific Journal of Operational Research (APJOR), 2022, vol. 39, issue 01, 1-23

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.

Keywords: Fairness concern; online shopping; pricing; two-stage (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217595921400327
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:apjorx:v:39:y:2022:i:01:n:s0217595921400327

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217595921400327

Access Statistics for this article

Asia-Pacific Journal of Operational Research (APJOR) is currently edited by Gongyun Zhao

More articles in Asia-Pacific Journal of Operational Research (APJOR) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().