The Impact of Dynamic Two-Sided Platform Pricing on Fairness Perception in the Sharing Economy

Date
2018-01-03
Authors
Angerer, Peter
Zimmermann, Steffen
Pale, Gerald
Salomon, Gina
Provin, Daniel
Kathan, Wolfgang
Matzler, Kurt
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Abstract
From an economic perspective, dynamic pricing seems to be the profit maximizing pricing strategy for consumer-to-consumer (C2C) sharing platforms because it allows balancing supply and demand over time. Based on distributive justice and equity theory we investigate how two characteristics of dynamic pricing, namely -˜fee changes over time’ and -˜fee differences across consumer groups’, influence fairness perception and intention to share of consumers. Using a laboratory experiment, we find that fee differences between lenders and borrowers is the dominant source of negative fairness perception, which in turn results in a lower intention to share, especially for the consumer group that is charged with a higher fee. Consequently, C2C sharing platforms have to be aware of this negative effect from fairness perception when they implement a dynamic two-sided platform pricing strategy to maximize profits.
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Keywords
The Sharing Economy, Dynamic Pricing, Fairness Perception, Intention to Share, Laboratory Experiment, Sharing Economy
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