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Pay-what-you-want because I do not know how much to charge you

José F. Tudón M.
Authors registered in the RePEc Author Service: José F Tudón Maldonado ()

Economics Letters, 2015, vol. 137, issue C, 41-44

Abstract: With any positive fraction of altruistic consumers in the population who give away any positive fraction of their gains from trade, there exists a high enough level of uncertainty about demand such that the monopolist prefers pay-what-you-want over the traditional monopoly or any other pricing mechanism. Low marginal costs facilitate the adoption of pay-what-you-want. Consumer welfare always increases with pay-what-you-want.

Keywords: Pay-what-you-want; Uncertainty; Behavioral pricing; Participative pricing (search for similar items in EconPapers)
JEL-codes: D4 D8 L2 (search for similar items in EconPapers)
Date: 2015
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