AN ANALYSIS OF THE ROLE OF PRICE FAIRNESS PERCEPTION AS A MEDIATING VARIABLE BETWEEN DYNAMIC PRICING STRATEGY AND CONSUMER BRAND TRUST
Keywords:
dynamic pricing; price fairness perception; brand trust; mediation; consumer behavior; digital platformsAbstract
Dynamic pricing is now common on digital platforms in Indonesia, yet frequent price changes may be judged as unfair and may erode the trust that consumers place in a brand. This study examines whether price fairness perception mediates the relationship between dynamic pricing strategy and consumer brand trust. Using survey data from 320 Indonesian consumers of ride hailing, online travel, and food delivery services, the study estimates a simple mediation model with age, gender, and usage frequency as controls and tests the indirect effect with a percentile bootstrap (5,000 resamples). Stronger perceived dynamic pricing lowers price fairness perception (a = −0.44, p < 0.001), and price fairness perception strongly raises brand trust (b = 0.54, p < 0.001). The total effect of dynamic pricing on brand trust is negative (c = −0.33), but once price fairness perception is included the direct effect is no longer significant (c′ = −0.09, p = 0.082). The indirect effect is −0.23 (95% CI −0.30 to −0.17) and accounts for about 72% of the total effect, which indicates full mediation in this sample. The mediation holds in all three service categories and is strongest for ride hailing. The findings suggest that firms should manage the perceived fairness of dynamic prices, and not only the price level itself, in order to protect brand trust.
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