Interesting example from Daniel Kahneman’s excellent psychology book, Thinking, Fast & Slow:

A hardware store has been selling snow shovels for $15. The morning after a large snowstorm, the store raises the price to $20.

Is this Fair, Acceptable, Unfair or Very Unfair?

A whopping 82% of participants in the experiment rated this as Unfair or Very Unfair, despite the fact it is a simple case of supply and demand – the economic principle which determines everyday vital commodity prices such as oil or grain. Kahneman concludes that a basic rule of fairness is that you shouldn’t use market forces to impose losses on others (the price hike was voluntary).

To me, there’s a wider implication. Milton Friedman-style thinking says that the only social responsibility of the hardware store is to maximise its profits. However, this assumes that the consumer will accept such thinking as fair and yet it is clear from many real-life examples as well as psychology experiments like this one that they don’t.

Fairness matters to people, and customers are people.