Painful Prices: The Moral Harm Model of Price Fairness

Abstract Consumers’ responses to seller’s prices, including perceptions of price fairness (PPF) and unfairness, are a crucial aspect of the marketplace. Although past literature has uncovered a variety of factors that influence PPF, the lack of an overarching conceptual framework has constrained understanding of when and why consumers are more likely to perceive prices as fair or unfair. The authors develop a conceptual model of PPF as moral judgments and propose that these moral PPF arise from consumer inferences of potential harm from a price. The conceptualization suggests that inferred harm—and thereby, PPF—is influenced by consumer vulnerability, product welfare impact and firm price strategy (e.g., costs and prices, differential pricing, and price promotions). The authors also propose that consumer political orientation and inferred firm self-defense motives moderate the relationship between inferred harm and PPF and that inferred firm motives for prices influence PPF. Eight studies test this conceptualization. The results support the moral harm model and provide novel insights, showing when unchanged prices, price increases, and price decreases are likely to be perceived as more unfair and when differential prices (including paying more than others) are likely to be perceived as fairer than equal prices.