Who sets prices better? The impact of pricing agents on consumer negative word-of-mouth when applying price discrimination

Abstract

Price discrimination often results in negative emotional experiences for price-disadvantaged consumers. Building on affective events theory, the impact of different pricing agents (algorithms vs. humans) on the negative word-of-mouth (NWOM) was investigated for price-disadvantaged consumers through seven experiments (n = 2080) and a single-paper meta-analysis. The findings revealed that algorithmic pricing led to lower NWOM among consumers. Further analysis suggested that the impact occurs through the sequential mediation of psychological contract violation and cynicism psychology. Additionally, relationship norms and implicit personality moderated the influence of pricing agents on NWOM. This research provides marketing communication strategies for tourism enterprises utilizing algorithmic pricing to mitigate consumer NWOM when implementing price discrimination strategies.