Fairness in consumer pricing

Research output: Contribution to journalArticlepeer-review

Authors

External organisations

  • Georgia State University
  • Harvard University

Abstract

Two case studies illustrate problems of fairness in consumer pricing. The May D&F case involves charges of deceptive advertising as a result of the retailer's “high-low pricing”; customers were allegedly deceived by artificially inflated “regular” prices and discounts promoted from these prices. The GDC case involves charges that 10,000 consumers were deceived into purchasing homes at prices higher than “fair market value”. Consumer policy and managerial issues are identified and analysis and recommendations provided. These cases are about fairness and trust within market exchange, and the responsibilities of sellers and consumers to provide and use information. Economic assumptions of nonfairness and caveat emptor are shown to be inadequate. The position that a fair price is the market price is questioned and an alternative suggested. Remedies which might be adopted by companies and pursued by policymakers are proposed. By creating more realistic consumer expectations, they would reduce problems of fairness in pricing.

Details

Original languageEnglish
Pages (from-to)117-140
Number of pages24
JournalJournal of Consumer Policy
Volume14
Issue number2
Publication statusPublished - Jun 1991

Keywords

  • Market Exchange, Fair Price, Consumer Policy, Consumer Expectation, Fair Market