The two components of a fair price: social and personal

摘要

Purpose - The purpose of this paper is to isolate the effects of personal fairness (the consumer's evauation of the magnitude of the price) and thernsocial fairness (the acceptability of the price given the social norms of the society).rnDesign/methodology/approach - This research adapted the scenarios used in the pivotal fair pricing study conducted by Kahneman, Knetsch andrnThaler. To demonstrate the difference between their results and the results when personal and social fairness were separated, the analysis replicatedrnthat of Kahneman, Knetsch and Thaler.rnFindings - The paper finds that an individual's self-serving concern for a personally fair price is moderated by their other-serving concern for a sociallyrnfair price.rnResearch limitations/implications - This research demonstrates that there is a significant difference in the personal and social fairness of price,rnwhether it is a price for goods, wages or rents.rnPractical implications - Sellers, employers and realtors can benefit from the knowledge that providing a socially acceptable reason for the increase ofrna product or rental price or the decrease of a wage can increase the likelihood that the recipients will judge the price increase as being fair.rnOriginality/value - Prior research into price fairness has confused the two aspects of a fair price. By isolating the two separate components, we clarifyrnhow individuals perceive price fairness in the personal sense and how that perception is altered by a concern for fairness in the social sense.