The Benevolence of the Baker : Fair Pricing under the Threat of Customer Anger

  title={The Benevolence of the Baker : Fair Pricing under the Threat of Customer Anger},
  author={Julio J. Rotemberg},
I suppose that an actor is considered fair if other actors cannot reject the hypothesis that the first actor is somewhat benevolent towards them. Aside from being consistent with some observations in experimental games, this approach can explain several features of pricing when consumers judge the extent to which suppliers are altruistic towards them. Under some conditions, this expectation of firm altruism can explain price rigidity while also providing novel explanations for third degree… CONTINUE READING


Publications citing this paper.
Showing 1-2 of 2 extracted citations


Publications referenced by this paper.
Showing 1-10 of 21 references

Retail Sales: A Study of Pricing Behavior in Supermarkets,

  • Pesendorfer, Martin
  • Journal of Business,
  • 2002

Regret: A Model of Its Antecedents and Consequences in Consumer Decision Making,

  • Tsiros, Michael, Vikas Mittal
  • Journal of Consumer Research,
  • 2000

A Theory of Fairness, Competition and Cooperation,

  • Fehr, Ernst, Klaus M. Schmidt
  • Quarterly Journal of Economics,
  • 1999

Perceptions of Price Unfairness: Antecedents and Consequences,

  • Campbell, C Margaret
  • Journal of Marketing Research,,
  • 1999

Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes ?

  • Borenstein, Severin, A. Colin Cameron, Richard Gilbert
  • Quarterly Journal of Economics,
  • 1997

Similar Papers

Loading similar papers…