Abstract:
Dynamic pricing is considered an efficient method of price management and has been used by hotels and airlines for decades. More recently, the urban mobility application (app) of Uber, present in more than 600 cities, has introduced real-time dynamic pricing to match supply and demand for the service. Although the literature highlights the benefits of dynamic pricing, behavioral economists argue that these price variations can be considered unfair. Thus, the objectives of this study are: to examine how consumers and tourists judge Uber’s price fairness; to investigate the perceptions of surge pricing and suppression of information about the price multiplier when requesting the service; and to examine the behavioral outcomes from perceived price unfairness. This study adopts a qualitative and exploratory approach using focus group method. The main results suggest that the perception of price depends on the context and evaluation of service benefits; although dynamic pricing can be considered acceptable, under certain conditions it can trigger feelings of unfairness and negative emotions on the part of consumers; and that tourists can adopt behavioral strategies to minimize the uncertainty of dynamic prices.
Keywords:
dynamic pricing; price fairness perceptions; tourist behavior; behavioral economy in tourism
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