Versioning, Price Fairness and Purchase Decision – An Empirical Investigation

Companies typically offer different variants of a product to address many heterogeneous consumer needs. This involves improving, reducing, correcting, or dismantling existing parts of a product, which is called versioning. This also serves to capture the different willingness to pay of consumers. According to rational choice theory, consumers weigh benefits relative to their costs in evaluating a product and generate the purchase decision. Consequently, the production method should be irrelevant. The empirical evidence of this study contradicts this thought. Based on Equity theory and Dual-Entitlement theory, a quantitative survey has been carried out. In this context, the four versioning methods were examined to determine whether they appear fair to consumers and how/if they influence their purchasing decisions. The results provide new insights for researchers from a theoretical and practical point of
view, e.g., price fairness, and ethical convictions have significant effects on purchasing decisions. Finally, the paper gives some general implications and recommendations for future research.