Voluntary payments, privacy and social pressure on the internet: A natural field experiment
AbstractThe emergence of Pay-What-You-Want (PWYW) business models as a successful alternative to conventional uniform pricing brings up new questions related to the task of pricing. We investigate the effect of a reduction of privacy on consumers' purchase decisions (whether to buy, and if so how much to pay) in a natural experiment at an online music store with PWYW-like pricing. Our study extends the empirical evidence of the reduced anonymity effect, previously established for donation or public goods contexts, to a consumption environment. We find that revealing the name of the customer led to slightly higher payments, while it drastically reduced the number of customers purchasing. Overall, the regime led to a revenue loss of 15%. The experiment suggests that even low levels of social pressure without face to face interaction on customers leads to a reduction of welfare. --
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Bibliographic InfoPaper provided by Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 82.
Date of creation: 2012
Date of revision:
Digital content; Voluntary Payments; PWYW; Public goods; Voluntary contributions; Social pressure; Internet; Privacy; Natural experiment;
Other versions of this item:
- Tobias Regner & Gerhard Riener, 2013. "Voluntary Payments, Privacy and Social Pressure on the Internet: A Natural Field Experiment," Jena Economic Research Papers 2013-032, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
- P14 - Economic Systems - - Capitalist Systems - - - Property Rights
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