The Role Of Trust For Dynamic Pricing In Retail - An Empirical Analysis Considering The Moderating Effect Of Perceived Price Fairness

Due to the increasing relevance of dynamic pricing for retailers, the aim of this study was to examine the role of trust in the context of dynamic pricing. In particular, we analyze the influence of perceived frequency of price changes on the customers' trust and the consequences of trust on the customers' purchase intention as well as on the intention for negative word-of-mouth. Furthermore, the moderating effect of perceived price fairness on the relationship between the perceived frequency of price changes and the customers' trust in the retailer was analyzed. The results indicate that the effect of dynamic pricing on customers' trust and consequently on behavioural intentions depends on how the price fairness of the retailer is perceived by the customers. Given this, it is essential for retailers to avoid a negative perception of their price fairness. The results are relevant for retailers, who plan to introduce dynamic pricing or have already implemented dynamic pricing. They should, in particular, develop appropriate communication strategies explaining customers the reason for frequently changed prices in order to build or maintain a positive price fairness perception.