Price Gouging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic

Avichai Snir (), Daniel Levy, Dudi Levy () and Haipeng (Allan) Chen ()
Additional contact information
Avichai Snir: Department of Economics Bar-Ilan University
Dudi Levy: Department of Economics, Bar-Ilan University
Haipeng (Allan) Chen: Tippie College of Business University of Iowa

No 2025-01, Working Papers from Bar-Ilan University, Department of Economics

Abstract: When and under what circumstances might people interpret a price increase as fair and acceptable is an important question in behavioral economics. We report the results of surveys we conducted in the US and Israel in 2020, a time when many prices increased following the spread of the COVID-19 pandemic. To assess respondents’ fairness perceptions of price increases, we focus on goods whose prices have increased during the pandemic, including some essential goods. Consistent with the principle of dual entitlement, we find that respondents perceive price increases as fairer if they are due to cost shocks than if they are due to demand shocks. However, we also find large differences across the two populations, as well as across goods.

Keywords: Dual Entitlement; Fairness Perceptions; Consumer Antagonism; COVID-19; Pandemic; Price Level; Price Adjustment; Price Increase; Price Rigidity; Sticky Prices (search for similar items in EconPapers)
JEL-codes: D90 E31 E70 M31 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2024-12
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econ.biu.ac.il/sites/econ/files/working-papers/2025-01.pdf Working paper (application/pdf)

Related works:
Journal Article: Price Gouging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic (2025)
Working Paper: Price Gouging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic (2025)
Journal Article: Price Gauging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic (2024)
Working Paper: Price Gouging or Market Forces? Fairness Perceptions of Price Hikes during the Pandemic (2024)
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:biu:wpaper:2025-01

Access Statistics for this paper

More papers in Working Papers from Bar-Ilan University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Department of Economics ().