A note on fairness and personalised pricing

Since the seminal papers of Fehr and Schmidt (1999) and Bolton and Ockenfels (2000), fairness has become an important discussion point in economics. Is it unfair that different people pay different prices for the same good or service? We provide what we believe to be a novel approach: We let normal...

Full description

Saved in:
Bibliographic Details
Published inEconomics letters Vol. 136; pp. 179 - 183
Main Authors Vulkan, Nir, Shem-Tov, Yotam
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.11.2015
Elsevier Science Ltd
Subjects
Consumer behavior
Consumer behaviour
Fair Pricing
Market design
markets
people
Price level
Price levels
prices
Pricing
Studies
Willingness to pay
Fair Pricing
L26
Market design
L11
D47
Pricing
Online AccessGet full text
ISSN0165-1765
1873-7374
DOI10.1016/j.econlet.2015.09.012

Cover

More Information
Summary:Since the seminal papers of Fehr and Schmidt (1999) and Bolton and Ockenfels (2000), fairness has become an important discussion point in economics. Is it unfair that different people pay different prices for the same good or service? We provide what we believe to be a novel approach: We let normal everyday consumers play the role of sellers who have access to consumers’ data (and willingness to pay). A strong finding of behaviour in this setup is that subjects charge a fixed percentage (approximately 64%) of the willingness to pay from each of their subjects, leading to a fair, whilst uneven, distribution of prices. Interesting, this 64% price level does not change when we vary the number of sellers competing in the market.
Bibliography:SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 14
ObjectType-Article-1
ObjectType-Feature-2
content type line 23
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2015.09.012