Online Pricing Strategy with Considering Consumers’ Fairness Concerns

Liu Yang, Yuanyuan Zheng, Jiasi Fan and Shaozeng Dong

Chapter 10 in Technology-Driven Supply Chain Management in Industrial 4.0 Era:Resilience, Responsiveness and Reliability, 2025, pp 279-301 from World Scientific Publishing Co. Pte. Ltd.

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: Supply Chain; Digitalization; New Technology; Resilience; Responsiveness; Reliability (search for similar items in EconPapers)
JEL-codes: L14 L23 O33 (search for similar items in EconPapers)
Date: 2025
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