Topic

Price fairness of mobile telephony prices

Theoretical basis

Price fairness research (e.g. Kahneman et al., 1986a, 1986b)

Research gap

Although numerous theories in the field of price fairness research and related areas exist, there are few studies on specific industries. Moreover, most empirical studies have been conducted in the United States, widely neglecting other parts of the world. Studying an international industry with rather standardised products that is characterised by national oligopolies may be beneficial to developing a better understanding of price fairness. For the study of price fairness, it is also important that participants are sufficiently familiar with the respective product and consider it relevant. Studying the fairness of mobile telephony prices satisfies all those conditions.

Research questions

(1) When do consumers perceive mobile telephony prices/pricing as fair or unfair?

(2) How do consumers react to unfairness?

Purpose

The purpose is to develop an empirically-based understanding of consumers’ fairness perceptions with regard to mobile telephony prices/pricing, as well as of their reactions to unfair prices.

Methodology

Data on 91 questions (43 items) is collected via an online survey with 753 respondents from Europe, North America, and Oceania. In most cases, the fairness of the scenarios presented to respondents is measured on an 11-point Likert-scale from -5 (totally unfair) to +5 (totally fair).

Findings

Price fairness may not primarily depend on the price that is charged, but on the totality of the situation. Most consumers may react to unfair prices in some way, though revenge will be unlikely to occur.

Practical implications

Price unfairness perceptions might be prevented, or at least reduced, if a better understanding of how consumers evaluate prices in terms of fair and unfair is gained.

Research limitations

Due to the sample size and convenience sampling, the generalisability of results is limited.

Originality/value

This study can provide insights into some basic rules governing consumers’ price fairness perceptions within buyer – seller relationships in the case of the mobile network operator industry.