When Raising Prices Is Better Than Cutting Quality
Across 25 experiments with 30,000+ consumers, quality cuts are judged significantly less fair than equivalent price increases—making quality reduction the highest-risk strategic response to cost pressures, regardless of its economic logic.
Summary
Evangelidis and colleagues ran 25 experiments with over 30,000 consumers testing how people judge different responses to cost pressure. Quality cuts consistently triggered the strongest sense of unfairness and betrayal, while price increases read as transparent and honest; smaller package sizes fell in between. The finding challenges the assumption that invisible adjustments are safer: consumers who discover a quiet quality cut react more harshly than those facing an explicit price rise.
Editor's opinion
When costs rise, raising the price openly beats quietly cutting quality, even at identical economic outcomes. Consumers forgive a visible price hike far more readily than a hidden downgrade.
Key concepts
Pricing strategy · fairness perceptions · quality-price trade-offs · behavioral economics of pricing