Price Fairness and Strategic Obfuscation

Price Discrimination and Fairness Concerns Price Discrimination and Fairness Concerns

We analyze the profitability of third degree price discrimination under consideration of consumers’ fairness concerns within an experiment and explain the results within a theoretical framework. We find that with an increase in the price differential negative reciprocal reactions by disadvantaged consumers become stronger compared to positive reciprocal reactions by advantaged consumers. Conseq...

Strategic Obfuscation and Retail Pricing

Retailers often stock items that are only slightly di¤erentiated from others’–di¤erent sizes of a popular brand, or di¤erent ‡avors in a common product line for instance. We argue that this practice is a form of strategic obfuscation, intended to raise consumer search costs, and margins on non-comparable products. We test our hypothesis using examples from several product categories in German a...

The Price of Fairness

In this paper we study resource allocation problems that involve multiple self-interested parties or players, and a central decision maker. We introduce and study the price of fairness, which is the relative system efficiency loss under a “fair” allocation assuming that a fully efficient allocation is one that maximizes the sum of player utilities. We focus on two well accepted, axiomatically j...

Price Obfuscation and Consumer Search: An Empirical Analysis∗

Firms affect consumer demand not only through their pricing decisions, but also through the ways in which they release price information to consumers. Non-uniform price schedules or the inclusion of complex pricing elements hinder comparison shopping, possibly eliminating products from consideration for purchase. We study the effect of such price complexity on consumer search and demand in the ...

Search, Obfuscation, and Price Elasticities on the Internet: Supplementary Material