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Price Discrimination Under Uncertainty Of Consumers Fairness Concerns
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Book Synopsis Price Discrimination Under Uncertainty of Consumers' Fairness Concerns by : Tomohisa Okada
Download or read book Price Discrimination Under Uncertainty of Consumers' Fairness Concerns written by Tomohisa Okada and published by . This book was released on 2018 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the effects of the unpredictability of consumers' fairness concerns on monopolistic third-degree price discrimination. We develop a simple repeated game framework to consider the monopolist's pricing strategy in the long run. In contrast to previous studies, we focus on an information disclosure mechanism derived from unpredictability of consumers' fairness concerns: the intensity of the resulting backlash is unknown until firms treat consumers unfairly. Although consumers' fairness concerns tend to lead to uniform pricing even in the absence of fairness unpredictability, this mechanism enhances this tendency and works to sustain uniform pricing in the long run.
Book Synopsis Third-Degree Price Discrimination with Fairness-Concerned Consumers by : Tomohisa Okada
Download or read book Third-Degree Price Discrimination with Fairness-Concerned Consumers written by Tomohisa Okada and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies monopolistic third-degree price discrimination, incorporating consumers' fairness concerns: discriminatory pricing antagonizes consumers and may reduce their demand. In contrast to the findings in previous studies, we show that consumers' concerns regarding price inequalities may deter discriminatory pricing by monopolists. Furthermore, a strong aversion to unfair pricing may improve social welfare compared with the situation in which consumers do not perceive price discrimination as unfair. Conversely, if the disutility from price inequality is not sufficiently large, social welfare decreases.
Book Synopsis The Economics of Price Discrimination by : Louis Phlips
Download or read book The Economics of Price Discrimination written by Louis Phlips and published by Cambridge University Press. This book was released on 1983-06-30 with total page 304 pages. Available in PDF, EPUB and Kindle. Book excerpt: A theoretical and unified explanation of how prices are determined in practice, written in a non-technical way.
Book Synopsis Signaling Through Price and Quality to Consumers with Fairness Concerns by : Xiaomeng Guo
Download or read book Signaling Through Price and Quality to Consumers with Fairness Concerns written by Xiaomeng Guo and published by . This book was released on 2016 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: Consumers with inequity aversion experience some psychological disutility when buying products at unfair prices. Empirical evidence and behavioral research suggest that consumers may perceive a firm's price as unfair when its profit margin is too high relative to consumers' surplus. We develop a game-theoretic model to investigate the effects of the consumer's inequity aversion on a firm's optimal pricing and quality decisions. We highlight several interesting findings. First, because of the consumer's uncertainty about the firm's cost, the firm's optimal quality may be non-monotone with respect to the degree of the consumer's inequity aversion. Second, stronger inequity aversion makes an inefficient firm worse off, but may benefit an efficient firm. Third, we show that stronger inequity aversion by the consumer can actually lower the consumer's monetary payoff (economic surplus) because the firm may reduce its quality to a greater extent than it reduces its price. Lastly, as the expected cost-efficiency in the market decreases, both the expected quality and the social welfare may increase rather than decrease.
Book Synopsis The Economics of Price Discrimination by : George Norman
Download or read book The Economics of Price Discrimination written by George Norman and published by Edward Elgar Publishing. This book was released on 1999 with total page 624 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume brings together significant articles which have appeared between 1971 and 1997, analyzing the application and effects of price discrimination.
Book Synopsis The Conflict of Price Differentiation and Price Fairness by : Luisa Domanska
Download or read book The Conflict of Price Differentiation and Price Fairness written by Luisa Domanska and published by GRIN Verlag. This book was released on 2019-01-11 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2018 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, Cologne Business School Köln, language: English, abstract: The thesis describes the conflict of price differentiation strategies and the consumers' perception of price fairness in different manners. By that, the role of a price is explained in detail in the role of marketing, as well as it's role in behavioral economics regarding price fairness. Different examples, being a highly discussed topic in the current state of the art, are brought together to demonstrate the variety of this price policy. Uber, the haircutting industry as well as typical gender-based pricing or emergency situations represent crucial practices that are discussed in regard of moral and ethical limitations in terms of price fairness. Finally, the work aims to understand the limitations on price differentiation in the context of price fairness and tries to answer questions as: When is price differentiation acceptable for consumers and when should firms reconsider differential price strategies due to a perceived abuse of trust, anger or similar emotions of targeted customers? For that, an empirical social research is considered to bring first and secondary data together, and to enable the defintion of those limitations to become a little clearer.
Book Synopsis Price Discrimination and Fairness Concerns by : Florian Englmaier
Download or read book Price Discrimination and Fairness Concerns written by Florian Englmaier and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Is All that Unequal Unfair? On the Perceived Fairness of Price and Wage Disparities by : Nofar Duani
Download or read book Is All that Unequal Unfair? On the Perceived Fairness of Price and Wage Disparities written by Nofar Duani and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a prominent Forbes magazine piece, Anderson (2019) asks whether ethics really matter to today's consumers. The answer to this question appears to be a resounding yes. “Unlike any other time in history, consumers are truly demanding more from the companies with which they do business. Today's shoppers are looking for ethical, eco-friendly brands that put people and the planet ahead of profits.” One need not look far for prominent examples of consumers' moral outrage over injustice and unfairness in the marketplace. Critiques of discrimination and unequal economic outcomes are abound, and often spread like wildfire in today's virtual spaces. Whether these changes reflect a fundamental shift in consumers' preferences or merely platformed and elevated by social media, it is undoubtable that companies face increasing pressures to behave more ethically. One survey of UK consumers found that more than half of those surveyed wanted companies to take a stand on issues they care about such as sustainability, transparency and fair employment practices (Accenture Strategy 2018). Companies that do not align with customer beliefs pay the price. Consumers avoid sellers they perceive as unfair and are more likely to demand refunds, complain, and spread negative word of mouth upon encountering unfair tactics (Fehr and Schmidt 1999; Xia and Monroe 2017; Xia, Monroe, and Cox 2004). In this research I study consumers' fairness concerns in two domains. In essay 1, I examine the perceived fairness of demographic price discrimination. In this joint work with Alixandra Barasch and Vicki Morwitz we study the demographic price discrimination in the digital age. We find that consumers' fairness perceptions depend on who consumers believe is responsible for implementing it--a person or an algorithm. Contrary to the substantial literature emphasizing consumers' algorithm aversion, we show that consumers view demographic-based price discrimination as more fair when prices are determined by algorithms (versus humans). We also offer evidence for a mechanism we propose: when demographic price discrimination is performed by algorithms, people are less likely to attribute the discriminatory action to the agent's moral agency. In essay 2, I explore consumers' perceptions of the fairness of the gender pay gap. In this work, conducted with Alixandra Barasch and Amit Bhattacharjee, we examine how consumers evaluate unequal economic outcomes arising from explicitly unbiased institutional processes. Three studies find that men perceive gender pay gaps as equally fair regardless of direction, while women perceive the exact same outcomes as more indicative of institutional unfairness when they are disadvantaged than when men are disadvantaged. Our findings highlight one reason for the contentiousness of discussions on outcome inequality: evidence for institutional discrimination and perceptions of what constitutes unbiased treatment may be in the eye of the beholder.
Book Synopsis Competitive Implications of Consumer Fairness Concerns by : Mushegh Harutyunyan
Download or read book Competitive Implications of Consumer Fairness Concerns written by Mushegh Harutyunyan and published by . This book was released on 2017 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: When consumers perceive that a firm's price or markup is unfairly high, they become less willing to purchase that firm's product. Hence, one might intuit that the existence of such fair-minded consumers would tend to induce firms to reduce their prices, lowering their profits and increasing the consumers' surplus. Contrary to this conventional wisdom, our analysis reveals that having a segment of fair-minded consumers in the market has a non-monotonic effect on the firms' profits. More specifically, if the fraction of consumers having fairness concerns is small, consumers' fairness concerns can actually alleviate price competition, making firms better off and consumers worse off. Within that range, an increase in the fraction of fair-minded consumers can increase the firms' profits and reduce the consumers' surplus. But when the fraction of fair-minded consumers is sufficiently high, the firms will compete more aggressively, in which case consumers' fairness concerns will benefit consumers and reduce the firms' profits.
Book Synopsis Handbook of Industrial Organization by : Richard Schmalensee
Download or read book Handbook of Industrial Organization written by Richard Schmalensee and published by North Holland. This book was released on 1989-09-11 with total page 640 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of industrial organization/Schmalensee.-V.2.
Book Synopsis Do Consumer Fairness Concerns Soften Price Competition? The Role of Declining Costs by : Guowei Liu
Download or read book Do Consumer Fairness Concerns Soften Price Competition? The Role of Declining Costs written by Guowei Liu and published by . This book was released on 2020 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Firms enjoy declining cost per unit of output with increasing cumulative output in a variety of industries, which gives rise to consumer concerns about transaction fairness. Consumers are less likely to purchase from a firm if it continues to reap an unfairly high profit margin. Intuitively, such consumer fairness concerns will induce firms to lower their prices. We develop an analytical framework to show, however, that firms may set higher prices with increasing consumer fairness concerns in the presence of competition. The indirect effect that consumer fairness concerns soften price competition caused by cost reductions dominates the direct effect that they intensify price competition caused by product substitution, when the cost-declining impact is sufficiently strong. Moreover, whether consumer fairness concerns increase or decrease social welfare also depends on the strength of the cost-declining effect. We also show the robustness of our main results by extending our model to a channel setting with quantity-discount contracts.
Book Synopsis Price Discrimination with Inequity-averse Consumers by : Katrin Buchali
Download or read book Price Discrimination with Inequity-averse Consumers written by Katrin Buchali and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Individual Price Discrimination - An Impossibility? by : Sarah Spiekermann
Download or read book Individual Price Discrimination - An Impossibility? written by Sarah Spiekermann and published by . This book was released on 2020 with total page 6 pages. Available in PDF, EPUB and Kindle. Book excerpt: As electronic channels to the customer (intelligent shelves, E-Commerce) are ideally suited to better comprehend customers' price sensitivity, communicate pricing policies and adjust prices regularly marketers are eager to charge people differently for the same product and according to their willingness to pay. This practice implies that not all customers are treated equally. Fairness concerns and privacy issues arise. In fact, when Amazon.com trialed this type of practice it encountered strong customer backlash. Despite this negative experience, this paper challenges the common notion that personalized prices are generally perceived as unfair and shows ways on how online channels may be used to raise fairness perceptions. An extensive overview of the pricing and fairness literature from economics is given. Furthermore, empirical results from an experiment with 160 subjects are presented.
Book Synopsis Algorithms and Fairness by : Inge Graef
Download or read book Algorithms and Fairness written by Inge Graef and published by . This book was released on 2018 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: While algorithms bring about benefits for consumers in the form of more efficient price setting, concerns have also been expressed about possible adverse effects including discrimination. The paper takes a competition law perspective in analysing a type of discrimination that is said to be facilitated by the use of algorithms, namely personalised pricing. This is a form of price discrimination between consumers whereby a firm charges each consumer a different price depending on willingness to pay. As the advent of data analytics and algorithm-based services has made it easier for firms to engage in price discrimination, a clarification of the latter's legality under competition law is to be welcomed. As such, the paper discusses the extent to which competition enforcement can be considered desirable to target price discrimination towards end consumers. In this regard, attention is also paid to the interaction with other regimes such as data protection, consumer protection and antidiscrimination law.
Book Synopsis Behavior-Based Price Discrimination with a General Demand by : Rosa Branca Esteves
Download or read book Behavior-Based Price Discrimination with a General Demand written by Rosa Branca Esteves and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper offers a complete picture of the impact of behavior-based price discrimination on profits, consumer surplus, and welfare in markets with a general demand function, where consumers and firms can discount the future at different discount factors. Regardless of the demand function considered, in comparison to uniform pricing, BBPD reduces firmsí second-period prices and profits. In contrast, we show that new results arise regarding the impact of BBPD on first-period prices. Under perfectly inelastic and CES demand, the firm-side e§ect is null and the consumer-side e§ect fully explains the increase in first-period prices. This is no longer the case when the price elasticity of demand varies with price level. Specifically, we show that the firm-side effect can lead firms to raise first-period prices, even when consumers are myopic. We also show that, depending on the demand function considered, the consumer side effect can act to reduce or increase first-period prices. The overall impact of BBPD on first-period prices depends on the interplay between these two effects. Our analysis reveals that the output effect and consumer switching play an important role in explaining the impact of BBPD on welfare. When discount factors are equal, BBPD may have a positive or negative impact on consumer surplus and social welfare, which contrasts with the result that BBPD is beneficial for consumers under a unit and CES demand. For a linear demand function, we identify the regions for firms and consumers discount factors where BBPD can simultaneously enhance or reduce total discounted profits, consumer surplus, and social welfare.
Book Synopsis The Antitrust Paradox by : Robert Bork
Download or read book The Antitrust Paradox written by Robert Bork and published by . This book was released on 2021-02-22 with total page 536 pages. Available in PDF, EPUB and Kindle. Book excerpt: The most important book on antitrust ever written. It shows how antitrust suits adversely affect the consumer by encouraging a costly form of protection for inefficient and uncompetitive small businesses.
Book Synopsis Recent Advances in the Theory of Third-Degree Price Discrimination by : Takanori Adachi
Download or read book Recent Advances in the Theory of Third-Degree Price Discrimination written by Takanori Adachi and published by Springer Nature. This book was released on 2023-07-06 with total page 85 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides an updated overview of the recent progress in the theoretical study of third-degree price discrimination. It is a marketing tactic and is said to be present if the unit price is different across different groups of buyers. Its welfare evaluation is often difficult because it entails two countervailing effects: on one hand, it exploits surplus from consumers who have high willingness-to-pay, but on the other hand, it generates gains from trade from consumers who otherwise would not purchase the good. Recognizing this difficulty, we provide new insights on evaluation of third-degree price discrimination in consideration of network effects and vertical product differentiation. Our analysis is particularly useful for the industries related to information and communication technologies (ICT) because these two elements characterize them. Furthermore, we also study the welfare effects of third-degree price discrimination under imperfect competition other than monopoly. At first, it seems that it may complicate the analysis under monopoly. However, we argue that the main thrusts of analysis under monopoly carry over to the case of oligopoly. We also take into account behavioral aspects and their implications for studying third-degree price discrimination. Overall, this book is designed to provide implications for contemporary management and policy issues by advancing theoretical issues in industrial organization.
