Skip to main content

Research Repository

Advanced Search

Pricing in Competitive Search Markets: The Roles of Price Information and Fairness Perceptions

Anbarci, N.; Feltovich, N.

Pricing in Competitive Search Markets: The Roles of Price Information and Fairness Perceptions Thumbnail


Authors

N. Feltovich



Abstract

We use a competitive search (price-posting) framework to experimentally examine how buyer information and fairness perceptions affect market behavior. We observe that moving from zero to one uninformed buyers leads to higher prices in both 2 (seller)×2 (buyer) and 2 × 3 markets: the former as predicted under standard preferences, the latter the opposite of the theoretical prediction. Perceptions of fair prices—elicited in the experiment—are a powerful driver of behavior. For buyers, fair prices correlate with price responsiveness, which varies systematically across treatments and impacts sellers’ pricing incentives. For sellers, fair prices correlate with underpricing, which also varies systematically across treatments.

Citation

Anbarci, N., & Feltovich, N. (2017). Pricing in Competitive Search Markets: The Roles of Price Information and Fairness Perceptions. Management Science, 64(3), 1101-1120. https://doi.org/10.1287/mnsc.2016.2620

Journal Article Type Article
Acceptance Date Jul 17, 2016
Online Publication Date Jan 10, 2017
Publication Date Mar 31, 2017
Deposit Date Aug 16, 2018
Publicly Available Date Aug 30, 2018
Journal Management Science
Print ISSN 0025-1909
Electronic ISSN 1526-5501
Publisher Institute for Operations Research and Management Sciences
Peer Reviewed Peer Reviewed
Volume 64
Issue 3
Pages 1101-1120
DOI https://doi.org/10.1287/mnsc.2016.2620
Public URL https://durham-repository.worktribe.com/output/1323117

Files




You might also like



Downloadable Citations