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The price fairness perception of the product is closely related to the reference price. If price of the product is higher than reference price, consumer will perceive it as unfair. As previously reported, the principles of price fairness perception such as dual entitlement theory, cost-plus rule and buffer rule have been discussed by many researchers. Dual entitlement theory means that both buyer and seller has the right. That is to say, sellers have the right to obtain the profit and sellers have the right not to buy when the price is not fair. On the other had, consumers will judge the price ad fair when the price is set on the cost level. Buffer rule means that consumers will judge the price as fair when the price should be constant without considering the fluctuation of the cost level. Kahneman et al.(1986a, b) is the first researcher who applied the dual entitlement theory to the price fairness perception. However, Urbany et al.(1989) also supported partially the effectiveness of the dual entitlement theory. That is, he showed that dual entitlement theory will be valid when the search cost is lower than the amount of price increase. But Kalpurkal et al.(1991) denied entirely the Kahneman’s conclusion and suggested that the cost-plus rule and buffer rule are more effective than dual entitlement theory. According to previous studies, there was no dominant rules to describe the phenomenon of price fairness perception. Under the above mentioned backgrounds, the purpose of this study is to explain which theory is more explainable in different situations. In order to describe which theory would make sense for perceiving the fairness, three scenarios based on the each theories was built and they were applied to three products such as digital camera, lettuces and aromatics which were selected in the pre-study. The hypothesis was that consumers would perceive the price fairness differently when each of three previous theories was applied to each product. The conditions considered are as follows when the products were selected. Firstly, lettuces represent the condition that the sellers can control the cost and the consumers have negotiation power, Digital cameras represent the condition that the sellers can control the cost, and have even negotiation power. Aromatics express that the seller cannot control the cost and the consumers have the negotiation power. To test the hypothesis, 3(three rules) by 3(three products based on the situations) experimental design was used. Each cell is composed of around 30 students who attend ‘S’ university. They are required to check the degree of fairness after reading the scenarios. We judged the degree of fairness by the number of respondents who checked 4(probably fair), or 5(fair) in 5 point interval scale.

Scenarios [표] Contrary to the hypothesis, and similarly to the Kalpurkal et al.(1991), the cost plus rule and the buffer rule are more valid than dual entitlement theory for explaining the price fairness perception. The reason why the contradictive results were shown is as following. Because consumers tend to maximize their own profit, they consider the rules to be beneficial as fairness. Results [표] This study has also some limitations. The manipulation of one of the scenarios did not work well in the main experiment, which is contradictory to the pre-study. The case of aromatics was not manipulated in the main experiment. Thus, I could not check the ideas I developed based on the literature review. Secondly, the meaning of dual entitlement theory was not delivered to the subjects because of the its delicate situation. The some of contradictory result was due to it.