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Price Fairness: Good and Service Differences and the Role of Vendor Costs LISA E. BOLTON JOSEPH W. ALBA* Prior research suggests that consumers are forgiving of a price increase that is commensurate with increased vendor costs. We argue that the perceived fairness of the price increase will also depend on the alignability of the cost and price increases, such that alignable increases will be perceived as more acceptable than nonalignable increases. Moreover, we predict that when a cost increase is non- alignable, consumers will be more receptive to a service price increase than a goods price increase. Evidence from a series of experiments supports both pre- dictions. onsumer reactions to a price increase are influenced while recognizing that the universe of offerings exists on a Cby a variety of factors, not the least of which is the continuum from the purely tangible to the purely intangible; principle of dual entitlement (DE; Kahneman, Knetsch, and see Laroche, Bergeron, and Goutaland [2001].) Tangible Thaler 1986). The DE principle argues that perceived fair- products provide consumers with a salient link between an ness is governed by the belief that vendors are entitled to offering and the vendor’s direct monetary investment, either a reference profit and customers are entitled to a re