Enticing for Me But Unfair to Her: Can Targeted Pricing Evoke Socially Conscious Behavior?

Abstract

Prior research shows that consumers stop purchasing from firms that treat them badly. In this research we show that consumers also resist firms that treat other consumers badly while favoring them. In three experiments, we demonstrate such social consciousness in the context of targeted pricing, where firms offer lower prices to new (versus old) customers. A significant proportion of consumers in our experiments give up money to resist the price-discriminating firm, especially when the discrimination is more salient or is not justified. Further, perceived unfairness mediates the relationship between the salience and justification of the pricing practice and consumer resistance.