Is uniform pricing by competing retailers perceived as fair?

Abstract

Despite the enormous negative economic influence on consumer well-being, price-fixing remains a largely unexplored area in consumer research. Previous research showed that consumers perceive different prices for the same product as unfair. However, our findings counterintuitively indicate that consumers may also perceive uniform prices as unfair. Two experimental studies examined the effect of price uniformity (uniform/nonuniform) and price patterns over time (increase/no change) on the perception of price unfairness and third-party complaint intention. The findings show that consumers perceive prices as unfair when retailers increase a uniform price simultaneously. This pricing strategy by retailers increases consumers' intention to report suspected price-fixing activities to authorities, that is, third-party reporting. Based on the findings, implications for marketing practices and tactics to enhance public policy are discussed.