Pay-what-you-want in groups – evidence from a field experiment

Till Proeger and Ann-Kathrin Blankenberg

Applied Economics Letters, 2017, vol. 24, issue 21, 1550-1557

Abstract: Pay-what-you-want (PWYW) mechanisms are a specific form of voluntary market payment. While a large number of recent studies have considered their design options, the aspect of group behaviour in PWYW situations has not been investigated, although a substantial part of payment decisions occur in group constellations. We provide initial evidence by running a field experiment implementing a PWYW mechanism in a cinema characterized by group attendance, finding that groups chose to pay similar amounts as individuals. Group payments can be increased by a prosocial framing of the decision, while an increase in group size and repeated participation reduce voluntary payments. We thus show that group payment decisions in PWYW situations are characterized by altruism concerns rather than in-group egoism.

Date: 2017
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DOI: 10.1080/13504851.2017.1324603

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