---
title: The One in Five
description: Explore the psychology behind price perception and fairness, revealing how expectations shape consumer reactions to price changes and the impact on businesses.
image: https://ifekete.com/hubfs/money-artwork.jpeg
---

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# The **One** In Five

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Reference points aren't only "what competitors charge". They're also "what I already believed this would cost me." 

Daniel Kahneman studied exactly this, decades before this website existed. With Jack Knetsch and Richard Thaler, 1986: a hardware store raises snow shovels from $15 to $20 the morning after a storm (pure demand, no new cost) and 82% of respondents called it unfair. A grocer who raises lettuce because the wholesale price rose gets treated far more gently: 79% call it acceptable. Rising costs buy real cover.

But look at the number left over: even with a clean, verifiable reason, 21% still called the cost-justified increase unfair. One in five don't care that you can justify the number. They cared that the number they'd already filed as true stopped being true. 

That's dual entitlement, their own term: a buyer feels entitled to the terms of the last transaction they knew about, a seller feels entitled to protect margin, and the two collide the moment a familiar price moves. The justification settles it for most people. It doesn't erase the loss for all of them. 

The ones who still feel it are the ones who write it down, in a review, in the two seconds before closing a tab. That's why the backlash reaches people who never paid the old price at all: reading what one wrote doesn't require having bought anything.

Silence is the other failure mode, and it works completely differently, not because it's safer, but because it never creates the thing that could be violated.

A company that's never named a number has no reference transaction on record. Nothing to raise, nothing to defend, nothing for a buyer to feel cheated out of. Also nothing for a buyer to feel good about.

Just an open question sitting where a fact should be.

 

Source: Kahneman, Knetsch & Thaler, "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," \*The American Economic Review\* 76(4), 1986, pp. 728–741.

Featured image: Sonya Clark, *Afro Abe II*, 2008, U.S. currency and yarn, 6.5 x 10 inches.

![István Fekete](https://145572396.fs1.hubspotusercontent-eu1.net/hubfs/145572396/Fekete_Istvan.webp)

[**István Fekete**](https://ifekete.com/blog/author/istvan-fekete)

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