An Application of Equity Theory to Buyer-Seller Exchange Situations

Abstract

Equity theory was applied to retail exchange situations to test hypotheses about subjects’ perceptions of inequity and behaviors they would perform. Subjects in Group 1 made evaluative ratings of 16 hypothetical situations in which two sources of inequity, high price and poor service, were introduced, along with varying levels of shopping frequency and item cost. Subjects perceived high price inequity situations as less fair than low ones, and high service inequity situations as less fair than low ones when price inequity was low. When price inequity was high, subjects perceived high shopping frequency situations less fair than low ones. Subjects in Group 2 chose the behavior they would be most likely to perform in each situation. When inequity was present, most subjects chose leaving the store, although several chose complaining about price or service when shopping frequency was also high.