Improving Customer Reactions to Brokered Ultimatums: An Application of Justice Theory

Abstract

Due to the growth of discount travel intermediaries such as Priceline, researchers have become interested in customer reactions to brokered ultimatum bargaining contexts. In this study, utilizing justice theory, we examine how procedural variations in a brokered ultimatum game (BUG) affect customer perceptions of informational and distributive justice. We also examine the degree to which justice perceptions affect customer behavior (repatronage) and attitudes (willingness to recommend the service to others). We find that offer acceptance/rejection and an enriched/non-enriched explanation exhibit direct effects on informational and distributive justice perceptions. We also find an interactive effect, such that, when an offer is rejected, justice perceptions can be improved through the use of an enriched explanation. Finally, we find that informational and distributive justice perceptions exhibit unique effects on repatronage behavior and the willingness to recommend the service to others.

Keywords: Justice, ultimatums, negotiation