If you’ve ever bought an airline ticket, you’ve experienced dynamic pricing. The price you pay for your ticket can go up or down depending on when you buy it, how many seats are still available, and a variety of other factors. Done properly, this pricing model can benefit both companies and consumers alike. So it's understandable that a growing number of industries seek to adopt it.
But potential pitfalls abound. When an organization that has previously used fixed pricing begins charging different prices for the same item or service, its customers may end up feeling cranky, cheated, or worse.
To see what leads consumers to see dynamic pricing as either fair or unfair, Wang Suk Suh—a first-year PhD student in the Lundquist College's Department of Marketing—has looked to the business of spectator sports, an industry that has recently begun to introduce the new pricing model for ticket prices. With his fellow researchers—the Lundquist College's Edwin E. & June Woldt Cone Professor of Marketing T. Bettina Cornwell and Yukyoum Kim at Seoul National University—Suh identified four factors that that consumers look to when deciding whether a pricing model seems fair. He then created a questionnaire to validate those four factors' influence on consumers' responses to price fluctuations. In all, his data set included 354 responses from 18-31 year olds. Of the four factors identified, the magnitude of the price differences and the more time that passed between price adjustments were the two biggest factors affecting whether consumer felt prices were fair or unfair.
On Friday, February 20, Suh had the chance to share his work with an audience drawn from the University of Oregon and the broader community when he participated in a poster session at the University of Oregon Graduate Student Research Forum. The forum is a one-day conference held annually to showcase research, scholarship, and creative expressions by graduate students in all of the UO’s colleges and schools. This year's forum showcased the work of more than 100 graduate students representing more than 50 disciplines.
View or Download Suh's Poster