Reconstructing Pricing Rationality among Muslim Micro Entrepreneurs through a Socio Islamic Economic Viewpoint

Abstract

Pricing in micro-enterprises is conventionally understood as a technical outcome of cost calculations and market competition. However, in Muslim societies, this understanding fails to capture the complex moral, social, and spiritual dimensions that shape real-world pricing decisions. This article examines how Muslim micro-entrepreneurs in Tulungagung Regency, East Java, Indonesia, construct their pricing rationality within a socio-Islamic economic framework. Using a qualitative phenomenological approach, data were gathered through in- depth interviews, direct observation, and documentation involving thirty-three micro enterprise informants across multiple business sectors. Data analysis employed grounded theory techniques: open coding, axial coding, and thematic coding, verified through credibility, transferability, dependability, and confirmability criteria. Findings reveal that pricing constitutes a normative socio- economic construct, not merely a mechanical market calculation. Three integrative thematic pillars emerge: (1) spiritual ethics as the foundation of economic rationality, replacing the homo economicus model with homo islamicus; (2) social solidarity functioning as an informal market regulatory mechanism balancing producer and consumer interests; and (3) distributive justice as the normative principle framing the legitimacy of prices. These three pillars give rise to the Integrative Islamic Socio-Economic Pricing Model (ISEPM), which reconceptualizes pricing as a tripartite moral-economic process balancing profit orientation, business sustainability, and socio-religious responsibility. This model challenges dominant neoclassical and behavioral economic theories, proposing instead a paradigm grounded in tawhid epistemology and maqasid al-shari'ah.