Understanding Perceived Price Fairness in Online Shopping

Price fairness is an important factor that influences online shopper drop-out rate in online shopping. This research attempts to understand the factors that influence online shoppers’ perceived price fairness. Based on the equity theory, we argue that perceived promotion fairness plays an important role in influencing perceived price fairness. We further argue that perceived promotion fairness is in turn significantly influenced by the shopper’s search efforts, contingent upon whether or not the promoted price is realized. A research model was developed that incorporates the equity theory, the motivation literature, and website design features. We developed a plan to conduct experiments to test the hypotheses.