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e-commerce allows for many innovations in pricing: some have been embraced by consumers, others rejected. Using an online experiment, we explore the role of norms in predicting consumer responses to differential pricing arrived at either by violating an established pricing norm (dynamic posted pricing; setting prices based on individual consumer demand) or not (two retailers pricing differently). Our findings support the critical role of norms, such that belief in the norm is a strong predictor of negative responses (i.e., fairness, trust, purchase, search and complaint intentions) and priming people to consider norms generally increases the negative response. We also find that prior trust in the firm acts as a partial buffer against the negative response to norm breaking but at a diminishing rate as prior trust increases.

PurposeThe purpose of this paper is to identify some of the current social norms of pricing that constrain sellers' discriminatory pricing on the internet. Violations of such social norms can lead to perceptions of price unfairness and swift and potentially damaging negative reactions from consumers. This paper seeks to demonstrate a state‐of‐the‐art technique for assessing social norms, to identify current norms using a large representative sample of US consumers and to distinguish between social norms and personal beliefs.Design/methodology/approachThe study involves an online survey of 387 respondents. The survey was designed to measure both the consensus and the strength of consumer reaction to seller behaviors. To establish that a behavior is the norm, the consensus has to be greater than a 65 percent agreement and the strength of the response has to be significantly different from neutral. Both personal beliefs and perceptions of society's beliefs were collected.FindingsThe paper finds that some of the social norms constraining discriminatory pricing on the internet are as follows: a seller should charge the same price for a given item to all customers; a seller should not charge a higher price to either more loyal or more frequent customers; a seller should not charge more to new or infrequent customers; and a seller should not charge less to infrequent purchasers. In addition, although it is not established as a norm, a surprising 50 percent of the respondents think that Americans in general believe that all retailers should charge the same price for the same item. The paper also finds that personal beliefs are consistent with social norms but more extreme.Practical implicationsThe implications are that e‐tailers need to be careful about price discrimination on the internet – many of the most profitable practices violate current internet pricing norms. For example, consumers do not think that it is fair to give a cheaper price to a new buyer than to a repeat buyer. However, different e‐tailers can offer the same product at a different price. That is not considered price discrimination.Originality/valueBy identifying the social norms of pricing, sellers are provided with the information they need to avoid unwitting violations of those norms. Sellers can thus avoid angering their customers, as Amazon did when they allegedly charged new customers less than established customers.

PurposeThe research questions are whether there is a difference in how men and women respond to unfair prices and, if so, whether this gender difference extends across national cultures. Is the difference due to nature or to nurture? This paper aims to answer these questions.Design/methodology/approachThe study uses scenarios to conduct a survey‐based analysis of the effects of gender and country on responses to personally and socially unfair prices.FindingsThe results indicate that the response to price unfairness is due more to nurture than to nature. Although American females tend to be more sensitive than men to price unfairness, there is little or no difference between men and women in Germany and South Korea: both sexes there react negatively to an unfair price, particularly when the seller has acted unjustly.Practical implicationsIn the USA, the gender difference in response to unfair prices suggests that different pricing tactics should be used for men than for women. However, since males in South Korea and Germany are just as sensitive as females to unfair prices, pricing tactics acceptable to American men may not work in other countries.Originality/valueThis paper takes a look at the manner in which a price increase for a frequently purchased but essential product is viewed as unfair. The paper examines the issue in three contrasting countries – Germany, South Korea and the USA – to determine if any observed differences are universal or culture‐specific.

PurposeThe purpose of this paper is to summarize the current research in disciplines outside marketing that applies to price fairness: research by behavioral economists, primate behavior researchers and social neuroscientists.Design/methodology/approachThe approach is descriptive, summarizing the extensive research into fairness being done in disciplines other than marketing.FindingsResearch outside marketing indicates that a fair price is a preference. It has social utility that is independent of the economic utility of a low price. Consumers can actually harm themselves to punish what they perceive to be an unfair price. Conversely, a fair price triggers the reward center of the mind, stimulating happiness. The research also indicates that the response to a fair or unfair price is emotional: fast and automatic. The strength of that emotional response to unfairness varies across people. However, despite the variation in reactions, to ignore the concern for fairness is to miss a major motivation in economic decision making.Originality/valueThe fairness research in other disciplines both supports and informs the marketing research into what constitutes a fair price and how people respond to price (un)fairness.

PurposeThe purpose of the paper is to investigate the effect of the number of choices on judged fairness and willingness to purchase.Design/methodology/approachA survey‐based study was conducted with a between‐subject, two×five design having two levels of price ranges (high/low) and five levels of complexity (1, 3, 7, 11, and 21 choices). A total of 519 surveys were completed with a minimum of 42 respondents per cell.FindingsGreater choice initially has a positive effect on consumers' likelihood of purchase and their judgments of the fairness of the price. But too much choice has a negative effect, thereby creating an inverted “U” response curve. The effect of choice set size, however, is only triggered when combined with a high price. When the price is low, the number of choices has no effect on the judged fairness of the price and likelihood of purchase.Practical implicationsThe practical implication is that, although consumers like to have choices, there is no increased benefit to increasing the number of choices as long as the price is low. And there is a declining benefit from increasing the number when the price is high. Since there is a managerial cost to providing choices, it appears prudent to only provide between three and seven.Originality/valueThe value of the paper is in demonstrating that, although some choice is beneficial in overcoming the negative impact of a higher price, too many choices can be detrimental in causing confusion.

Prior research has demonstrated that buyers primed to think of fairness are more cooperative in price negotiations. This research was based on the seller responding in accordance with the norm of reciprocity. The present research supports these results, but shows that when sellers do not reciprocate the buyer's cooperative behavior, fairness-primed buyers act to punish the seller. They retaliate by becoming radically competitive. Priming a concern for fairness appears to sensitize negotiators to social concerns. They act more fairly and more emotionally and demand fair treatment in return. They are, therefore, both more cooperative when their opponent reciprocates and less cooperative — seemingly even vindictive — when their opponent does not.

In negotiations, it is generally assumed that both the buyer and the seller are rational, motivated by economic self-interest. Hence, the range of prices acceptable to the buyer is expected to have a self-serving bias just as is the range of prices acceptable to the seller. These individually biased ranges of acceptable prices can overlap, constituting a positive “bargaining zone” (Walton and McKersie 1965). Negotiations which take place within this zone are expedited since any outcome within the zone is mutually satisfactory.

This research tests the effect of rule-based price fairness (as opposed to fairness in the sense of “cheap”). In the first study, perceived rule-based price fairness is shown to influence the inferred fairness of the seller's pricing process which affects buyers' attitude toward the seller and willingness to purchase. In the second study, consumers are provided information as to whether the seller has followed a rule-based pricing process. The results indicate that the knowledge of how a price has been determined has a significant effect on how the price is perceived. The conclusion is that not just the price tag itself but how that price has been determined affects consumers' perceptions of fairness and willingness to purchase.

In this study, the homogeneity versus heterogeneity of global consumption is tested in a cross‐cultural price/brand effect model. Middle‐class consumers in two countries are compared: the USA, an established consumer society, and India, a recently developing consumer society. Focus groups demonstrate the tremendous importance of brands in India, but survey data suggest that, compared to Americans, Indians actually have a lower perception of brand quality. They need to be convinced of standardized quality. Indians are, in addition, more positive than Americans about economizing. This implies that they feel guilty about consumption. These differences between Americans and Indians influence how price and brand affect their different purchase decisions: the Indian is a much tougher consumer to whom to sell. The results suggest that consumption, while it is becoming global, is still heterogeneous. It is being interpreted and implemented differently in different cultures.

In developing pricing strategies for the global marketplace, sellers have to consider the differences in how their consumers process information on prices. One potential difference is in attributions: whether the consumer blames the seller for a negative outcome such as a price increase. Prior research suggests that in individualistically oriented groups such as Anglos (and perhaps males), causal attributions are egocentrically biased: the cause of a negative outcome tends to be attributed to the actions of another person. In collectively oriented groups such as Hispanics (and perhaps females), the bias is much less. Empirical results, however, reveal that all groups demonstrate biased attributions of price increases. As a result, they have a less positive attitude toward the seller. The difference is that Hispanics and females generally infer that sellers have behaved in a more socially approved manner than do Anglos and males.