As a Masters student I am frequent visitor to the Arts and Social Science Graduate Centre at the University of Nottingham. Possibly the best thing about the Grad Centre (other than the absence of pesky undergrads, obviously) is the coffee machine which offers all types of tea and coffee for 25p. This makes it a hot attraction compared to the other machines of campus which charge at least 90p and especially compared to Costa which charges anything over £2.50.
Apparently in the first five weeks of term the Grad Centre machine served 5000 drinks, making it the busiest machine on campus.
Then, this week, the price doubled to 50p. No warning. No apology. The cost of coffee just doubled overnight. Outrageous! So unfair!
My reaction was probably not dissimilar to many. But why is it unfair for the price to rise? I have happily paid £3 for a coffee elsewhere, and it's not like going without coffee will kill me (I'm not an Arts student). If the price had always been 50p I would have had no complaints. It's just supply and demand.
People's perception of fairness is a very interesting area of study within behavioural economics.
For example, is it unfair for a shop to put up the price of shovels when it snows? An economist would answer no and point to the laws of supply and demand. A consumer, however, might think it exploitation.
Behavioural economics has shed a lot of light on what people consider fair and what they do not, but for now I'll conclude by simply noting that my degree in economics was not enough to stop me thinking a rise in the price of coffee was fair.
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