Faculty & Research
Perceived Fairness of Demand-based Pricing for Restaurants
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Vol 43 No 1
By: Sheryl E. Kimes Ph.D. and Jochen Wirtz
Executive Summary: Demand-based pricing is mostly absent in the restaurant industry because many operators are concerned that customers might perceive such pricing practices as unfair and unacceptable. Yet experience in other industries has shown that setting reasonable price fences can be effective in improving the perceived fairness of demand-based pricing. This study, which looked at five fences that might be suitable in a restaurant context, found that restaurant patrons perceive the following demand-based price fences to be fair: coupons, time of day, and lunch-versus-dinner pricing. The study also explored whether framing demand-based pricing as discounts rather than surcharges made a difference in customers' assessment of fairness.
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- Perceived Fairness of Demand-based Pricing for Restaurants By: Sheryl E. Kimes Ph.D. and Jochen Wirtz
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