Gain-sharing arrangements, which involve the seller promising to realize a measurable economic performance gain that is shared between the seller and customer, are used in the context of performance-based contracting. Prior academic research explicating the implementation of this managerially relevant practice has mainly uti-lized anecdotal evidence and has primarily focused on the sellers perspective. Thus, we lack rigorous explana-tions as to what drives customers willingness-to-switch to a gain-sharing arrangement. To overcome this limitation, we build on agency theory and equity theory to develop two competing and theoretically grounded explanations (risk-based vs. fairness-based) to explain customers willingness-to-switch. We conducted a quali-tative pre-study and collaborated closely with an industry partner to develop a realistic experimental scenario and tested the proposed explanations with data from 437 professional purchasers. The results show that decision-makers in customer firms respond differently to economically equivalent gain-sharing arrangements that feature different pricing schemes. More specifically, the fairness perception, but not risk perception, drives the cus-tomers willingness-to-switch. The findings of this study advance B2B pricing research by showing that buying decisions in firms are not necessarily guided by economic rationality-based arguments. Instead, in the context of gain-sharing arrangements, the choice is guided by what is perceived as fair.