In four experiments we asked consumers to suggest a new fair price for a firm that has experienced an increase in production costs. For nonsubsidized firms, subjects reason according to the principles of distributive justice, disconfirming the predictions based on the dual
entitlement principle. When the firm is subsidized, the dual entitlement principle is supported. Follow-up studies suggest that the dual entitlement effect for subsidized firms is limited to (1) situations in which respondents are impartial observers, rather than the firm's own
customers, (2) situations where the stakeholders are affected in their long term (tax-payer) interests, or (3) situations in which customers do identify strongly with the objectives of the subsidized company.