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Fairness of Pricing Decisions

Published online by Cambridge University Press:  23 January 2015

Kathryn Graddy  and
Diana C. Robertson
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Abstract:

Our research investigated pricing policies of fast-food restaurants in predominantly black neighborhoods. We argue that the lack of monitoring of franchisees’ pricing policies leads to higher prices. Results indicate that franchisees are significantly more likely than company-owned outlets to charge higher prices based on the proportion of blacks in a neighborhood. These price differences do not appear to be explained away by cost or competition factors. Our findings do not establish an intent to discriminate; nevertheless, we discuss the fairness of the pricing structure found.

Type
Articles
Information
Business Ethics Quarterly , Volume 9 , Issue 2 , April 1999 , pp. 225 - 243
Copyright
Copyright © Society for Business Ethics 1999

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