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Norms, moods, and free lunch: Longitudinal evidence on payments from a Pay-What-You-Want restaurant

  • Riener, Gerhard
  • Traxler, Christian

We study the distribution and evolution of payments in a Pay-What-You-Want restaurant. Despite missing price tags and despite the option to pay nothing at all, we observe that the vast majority of guests makes strictly positive payments. Over the two years covered by our data, average payments decline slightly, converging at a positive level. At the same time, the number of daily guests increases steadily, resulting in a considerable increase in total revenues. We discuss one possible interpretation of the long-term trend in payments in terms of social norms. We further show that short-term fluctuations in average payments are partly explained by exogenous weather changes. We provide evidence that – in line with work in psychology – weather-induced changes in mood affect payments.

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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 41 (2012)
Issue (Month): 4 ()
Pages: 476-483

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Handle: RePEc:eee:soceco:v:41:y:2012:i:4:p:476-483
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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