Mapping consumer perception on price fairness and intention to report suspected price-fixing activities in Hong Kong

Description: In this exploratory qualitative study, we investigate variables that can be used to influence consumer response, to increase consumer reporting of suspected price-fixing activities to authorities.

Research Question: What are the factors influencing intention to report suspected price-fixing cases? What is price fairness? Is the same price fair?
Method and Data: The method of interpretive semi-structured interviews was used in this study to allow an in-depth understanding of informants’ perceptions on price-fixing and reporting of suspected activities of price-fixing to the government. In this early stage of our investigation, qualitative interviews allowed for the collection of rich information to assist in2021 AMA Winter Academic Conference 75 2 the generation of new insights (Creswell 2003). In addition, interviews allowed for a detailed elaboration of informants’ opinions and shared consumption experiences (Belk, Fischer & Kozients 2013). Consistent with interpretive consumer research (e.g., Fournier, 1998, Ahuvia 2005, Arsel 2017), we selected ten informants (six men and four women) using the convenience sampling technique. The age of informants ranged from 24 to 60 years ago.
Depending on the flow of the interviews, certain topics were covered in a loose sequence. For example, the informants were asked whether they had noticed any products and services that were sold at the same price for a consistent period of time. Informants shared their personal lived experiences and revealed their attitudes towards price-fixing, price (un)fairness, and intention to report any suspected price-fixing activities in their interview.

Summary of Findings: Our qualitative data analysis revealed underlying factors that influenced informants' intentions to report suspected price-fixing activities: (1) “Same Price Not at All Fair”, (2) “Low Trust in Government”, and (3) “Low Perceived Consumer Effectiveness”.

(1) Based on previous studies, consumers tend to see prices as unfair if they pay a higher price in one store, in comparison to other stores (Bolton et al. 2003 and Xia et al. 2004). According to this understanding, consumers perceive that prices are fair if products are identical in competing stores. Our qualitative findings, however, to some extent, contradicted this understanding.

(2) While almost all the informants disapproved of price-fixing activities, they showed little interest in reporting suspected price-fixing activities to the government due to low trust in the Hong Kong government. More than half of the informants expressed their disappointment in the government and explained why they have no or low intention to report suspected price- fixing activities to the government.2021 AMA Winter Academic Conference 76 3 (3) Low perceived consumer effectiveness is another theme that emerged from the interview data, reducing informant interest to report suspected price-fixing activities to the government. In short, consumers do not think they can make a difference in improving the price-fixing situations in Hong Kong.