How Do Price Fairness Perceptions Differ across Culture?

Abstract

This research investigates the effects of across-consumer price comparisons on perceived price fairness as a function of culture. Collectivist (Chinese) consumers are more sensitive to in-group versus out-group differences than individualist (U.S.) consumers. The collectivist perspective orients consumers toward the in-group and heightens concerns about “face” (i.e., status earned in a social network) that arise from in-group comparisons. Process evidence for the causal role of cultural differences derives from manipulated self-construal and measurement of the emotional role of shame evoked by face concerns. Finally, in a robustness test, an alternative operationalization of the in-group/out-group distinction extends the findings to the context of firm relationships.