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Pay-what-you-want versus pick-your price: The interplay between participative pricing strategies and consumer's need for cognition

Author

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  • Rathore, Himanshu
  • Jakhar, Suresh Kumar
  • Kumar, Satish
  • Kumar, Madhumitha Ezhil

Abstract

We examined the interaction between the need for cognition and participative pricing strategies and their influence on pricing effort, purchase intention, price paid, and sales volume. Using two vignette-based experiments and two field experiments, we manipulate participative pricing strategy at three levels- pay-what-you-want, pick-your-price, and fixed price. Results suggest that- High need for cognition individuals have a higher purchase intention for pay-what-you-want while low need for cognition individuals have a higher intention for pick-your-price. Higher (lower) pricing efforts elicit high purchase intention for individuals with a higher (lower) need for cognition. The average price paid by both low and high need for cognition consumers is not significantly different from the market price. Participative pricing generates more sales volume than a fixed price. The study’s findings have practical implications. Retailers can choose to boost purchase intention by offering participative pricing strategies that match the cognitive orientation of the consumer.

Suggested Citation

  • Rathore, Himanshu & Jakhar, Suresh Kumar & Kumar, Satish & Kumar, Madhumitha Ezhil, 2022. "Pay-what-you-want versus pick-your price: The interplay between participative pricing strategies and consumer's need for cognition," Journal of Business Research, Elsevier, vol. 141(C), pages 73-84.
    • Handle: RePEc:eee:jbrese:v:141:y:2022:i:c:p:73-84
    DOI: 10.1016/j.jbusres.2021.12.001
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    References listed on IDEAS

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    3. Regina Wittstock-Lang & Magdalena Bekk & Matthias Spörrle, 2023. "I do not want to set my own price! Indirect effects of emotions and moderation effects of skepticism explain reduced use intentions towards participative pricing models," PLOS ONE, Public Library of Science, vol. 18(2), pages 1-23, February.
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    5. Ali Sabbaghnia & Jafar Heydari & Jafar Razmi, 2023. "Participative pricing and donation programs in a socially concerned supply chain," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 146-164, January.

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