Game Changer

CHAPTER 20Fairness: How to Differentiate Prices Across Customers

With contributions from Ricard Vila

The human sense of fairness is so ingrained that we share those kinds of emotional responses with other primates. In his famous TED Talk, Dutch primatologist Frans de Waal shows a video of capuchin monkeys who are very content to receive pieces of cucumber as rewards when they bring a stone to a supervising researcher. That peace lasts until one monkey notices that her partner just earned a grape for the same task.¹

The grape is a higher price, because to capuchins, like most humans, a grape full of sugar tastes much better than a slice of cucumber. To understand this difference, the “underpaid” capuchin brings the researcher a different type of stone. When she receives cucumber again, she angrily throws it back at the researcher, rattles the cage, and tries to make her discontent as clear as possible.

The cucumber slice is no longer a fair price. What's more, when offered a now inferior reward, the capuchin prefers to receive no reward at all. Paradoxically, getting no value is better than getting an unfair amount of value.

What applies to capuchin monkeys also applies in our vastly more complex $100‐trillion global economy. Monetary transactions are essential for the smooth functioning of society, because they allow strangers to cooperate across different scenarios and vast ...