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Charitable giving, suggestion, and learning from others: Pay-What-You-Want experiments at a coffee shop

Sangkon Park, Sohyun Nam and Jungmin Lee ()

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2017, vol. 66, issue C, 16-22

Abstract: We examine consumer behavior under Pay-What-You-Want (PWYW) pricing by conducting a series of field experiments that implemented different pricing schemes at a coffee shop: PWYW, PWYW with charitable giving, PWYW with charitable giving and a suggested price, and—for comparison—a regular fixed price group and a fixed price with giving group. We find that the PWYW scheme, when combined with charitable giving and a suggested price, yields net revenue as large as that under the fixed price scheme. We also find that consumers under PWYW with charitable giving are responsive to a suggested price and seek to learn from others.

Keywords: Pay-What-You-Want; Charitable giving; Social norms; Suggested price; Reference prices; Field experiment (search for similar items in EconPapers)
JEL-codes: D49 H41 C93 (search for similar items in EconPapers)
Date: 2017
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