Anchors and norms in anonymous pay-what-you-want pricing contexts

Catherine A. Armstrong Soule and Robert Madrigal

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2015, vol. 57, issue C, 167-175

Abstract: In this paper, we examine whether firm-supplied numbers influence reported payments in anonymous pay-what-you-want (PWYW) exchanges. PWYW allows consumers to select any level of voluntary payment. Using two experiments, we find that consumers voluntarily report payments greater than zero on average in the absence of social pressure. Further, reported voluntary payments are influenced by numbers in the exchange context. When higher numbers are present, consumers respond by reporting they would make higher payments. However, the meaning of the number is also important. When the number represents a descriptive norm (what others are doing), it is more predictive of reported payments compared to a number that represents an injunctive norm (what is the “correct” thing to do) in some cases. Our results indicate that PWYW may indeed be feasible for products that are purchased anonymously and that firms can strategically provide information that affects payments.

Keywords: Pay-what-you-want; Voluntary payments; Participative pricing; Consumer behavior; Norms; Anchoring (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:57:y:2015:i:c:p:167-175

DOI: 10.1016/j.socec.2014.10.001

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