There is nothing permanent except change—analyzing individual price dynamics in “pay-what-you-want” situations

Laura Schons (), Mario Rese, Jan Wieseke (), Wiebke Rasmussen (), Daniel Weber () and Wolf-Christian Strotmann ()

Marketing Letters, 2014, vol. 25, issue 1, 25-36

Abstract: This study is examines the dynamics in prices paid in “pay-what-you-want” situations over multiple customer–seller transactions on an individual customer level. The analysis of potential dynamism in prices paid allows for an assessment of the profitability of pay-what-you-want pricing for sellers of frequently bought products and services. To empirically validate the framework, the authors conduct a field study that focuses on the aggregate and individual dynamics in prices paid over customers’ multiple purchases. Using latent growth modeling, the authors find significant but declining decreases in prices paid. Further, they identify stable individual and relational difference factors which predict steeper or more gradual declines in prices paid. Customers’ individual preferences for fairness and price consciousness as well as their overall satisfaction with the seller alleviate price declines. The authors discuss the practical and theoretical implications of these findings. Copyright Springer Science+Business Media New York 2014

Keywords: Participative pricing; Pay what you want; Long-term price dynamics; Reference prices; Latent growth modeling (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11002-013-9237-2 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:mktlet:v:25:y:2014:i:1:p:25-36

Ordering information: This journal article can be ordered from
http://www.springer. ... etailsPage=societies

DOI: 10.1007/s11002-013-9237-2

Access Statistics for this article

Marketing Letters is currently edited by Joel Steckel and Peter Golder

More articles in Marketing Letters from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().