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

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  • Park, Sangkon
  • Nam, Sohyun
  • Lee, Jungmin

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.

Suggested Citation

  • Park, Sangkon & Nam, Sohyun & Lee, Jungmin, 2017. "Charitable giving, suggestion, and learning from others: Pay-What-You-Want experiments at a coffee shop," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 16-22.
    • Handle: RePEc:eee:soceco:v:66:y:2017:i:c:p:16-22
    DOI: 10.1016/j.socec.2016.04.010
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    Cited by:

    1. Vahid Ashrafimoghari & Jordan W. Suchow, 2022. "A Game-theoretic Model of the Consumer Behavior Under Pay-What-You-Want Pricing Strategy," Papers 2207.08923, arXiv.org.
    2. Chang, Chia-Chi & Chen, Po-Yu, 2019. "Which maximizes donations: Charitable giving as an incentive or incentives for charitable giving?," Journal of Business Research, Elsevier, vol. 97(C), pages 65-75.
    3. Preeti Narwal & J. K. Nayak, 2020. "Investigating relative impact of reference prices on customers’ price evaluation in absence of posted prices: a case of Pay-What-You-Want (PWYW) pricing," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(4), pages 234-247, August.
    4. Egbert, Henrik & Greiff, Matthias, 2023. "Pay-What-You-Want für öffentliche Güter: Eine Fallstudie zu vhs.wissen live [Pay-What-You-Want and Public Goods: a case study of vhs.wissen live]," MPRA Paper 118432, University Library of Munich, Germany.
    5. Emili Vizuete-Luciano & Oktay Güzel & José M. Merigó, 2023. "Bibliometric research of the Pay-What-You-Want Topic," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(5), pages 413-426, October.

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    More about this item

    Keywords

    Pay-What-You-Want; Charitable giving; Social norms; Suggested price; Reference prices; Field experiment;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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