The Effect Of Consumers’ Sense Of Power And Reference Resources On Their Perceptions Of Price Fairness And Mechanism

Consumers’perceptions of price unfairness may lead to many negative consequences for both consumers and sellers, including lowering perceived consumption value, reducing customers’satisfaction, generating negative emotions such as shame and anger, spreading negative word-of-mouth, or declining repurchase intension. The negative consequences are even worse when sellers widely apply dynamic pricing strategy in response to current market environment. There exit different degrees of power and can arise in consumers’ everyday activities. Power has long been argued as a pervasive and fundamental component in social interactions and interpersonal relationship. It is also one of the individual identities and foundation of social hierarchies. The significant effects of power on human psychology and behavior, such as information processing, social cognition, preference constructive and behavior decision have been relentlessly examined in the psychology, organizational behavior, and sociology literatures. Consumers usually build their perception of price fairness on the basis of social comparison, thus how to choose the reference becomes very important. The dissertation aims to explore the interaction between the power and reference price on perception of price unfairness.Firstly, it outlined research background, purpose, significance, method, framework and innovation. And then reviewed and summarized the concept, theory and related research of perceptions of price (un)fairness. After that, it focused on the literatures related to the effects of power on human activities, especially on consumer behavior. Then a conceptual framework of power research is presented to summarize prior research and direct future research.On the basis of such reviews, this dissertation examined two-way interaction between the power and reference price on perception of price unfairness through three researches and three methods respectively. The first research is consumer interviews. Supported by analysis of8face-to-face interview records, it showed sellers’dynamic pricing practice in many domains have induced buyers’ perceptions of price unfairness and further confirmed the research question that consumers’sense of power would affect the price fairness perception when the reference point is based on self-comparison versus other-customer comparison.The second research are conducted by scale survey on the source of general sense of power in China and the effect of power on comparison direction and perceptions of self-competence. The results showed that power differences are influenced by sex, degree of education, position in organization and self-reported social status. To be specific, Women possessed higher sense of power than men, and individuals who have higher education, higher position in organization, higher self-reported social status would have more sense of power. Moreover, high power preferred upward social comparison than low power, and low power favored downward social comparison than high power when they judged their situations. Furthermore, faced disadvantage unfairness, high power showed more confidence in their competence to influence or change the situation than low power.Based on results mentioned above, the third interpretative research is designed to have4experiments to examine hypotheses that how temporarily having or lacking power would affect the price fairness perception when the reference point is based on self-comparison versus other-customer comparison. Although a variety of power manipulations are used, it draws a conclusion that high power participants perceive more unfairness in other-reference than low power when judging price fairness, meanwhile, low power participants perceive more unfairness in self-reference than high power. What’s more important is that such effect may occur under perceived self-incompetence (or self-threatened). It demonstrates that high power holders feel especially threatened in other-reference than low power when they pay more than others. On the contrary, low power holders feel especially threatened in self-reference than high power when they pay more than they paid. Moreover, for high power participants, they feel more angry when reference price was other-customer instead of themselves. However, for low power participants, they feel more sad and frustrated when the reference was themselves instead of others. Although both high power and low power will decrease their repurchase intention after perceived unfairness, they showed different complaint intention. Contrary to low power consumers, high power intended to positive complaint, especially in price discrimination comparing to other-customer.Finally, it summarized the main conclusions, discussed the implication of marketing practice, indicated insufficiency of this dissertation and directions for future research.