Fairness in markets: A laboratory investigation

To Buy or Not to Buy? An Experimental Study of Consumer Boycotts in Retail Markets

“…KKT show that price increases are more acceptable to consumers if they are justified by cost increases than if they are justified by demand increases. To be able to draw conclusions in this respect, one needs to compare a condition in which all participants are informed about the cost shock with a condition in which consumers have no information on the cost shock, or in which demand is increased (see Kachelmeier et al 1991a,b for such comparisons).…”

Price rigidity in customer markets

“…However, the authors do not investigate the hypothesis that price rigidity is less pronounced if price increases can be justified by cost increases. The relevance of this hypothesis is investigated in a series of three closely related papers (Kachelmeier et al, 1991a(Kachelmeier et al, , 1991bFranciosi et al, 1995). These papers find weak and non-persistent price rigidity when price increases cannot be justified by cost increases.…”

The Effect of Glucose Consumption on Customers’ Price Fairness Perception

“…However, findings by Kahneman, Knetsch, and Thaler (1986) led to the principle of Dual Entitlement, which is by now the most influential theoretical approach to an explanation of price fairness perception (Bolton and Alba (2006); Bolton, Warlop, and Alba (2003); Campbell (1999); Kachelmeier, Limberg, and Schadewald (1991); Kalapurakal, Dickson, and Urbany (1991); Vaidyanat and Aggarwal (2003)). These studies all argue that profit is one of the most critical factors that influence customers' price fairness perception.…”