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Who is watching me? Disentangling audience and interpersonal closeness effects in a Pay-What-You-Want context

Author

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  • Hofmann, Elisa
  • Fiagbenu, Michael E.
  • Özgümüs, Asri
  • Tahamtan, Amir M.
  • Regner, Tobias

Abstract

We disentangle by means of a laboratory experiment two relevant drivers of voluntary payments in Pay-What-You-Want settings: the effects of interpersonal closeness and an audience. Our 2×2 between-subjects design varies the interpersonal closeness of buyers and the observability of their payments by other buyers. This allows us to enrich the research on both drivers and identify whether the presence of close others (closeness effect), payment observability (audience effect), or the combination of both affects voluntary payments. We find that both effects separately are sufficient to increase voluntary payments. Payments are, on average, higher if they are observed by an audience and if buyers are acquainted with each other. While the effect of audience and interpersonal closeness on payments is additive in total, we do not find an interaction effect, if payments are observed by close others.

Suggested Citation

  • Hofmann, Elisa & Fiagbenu, Michael E. & Özgümüs, Asri & Tahamtan, Amir M. & Regner, Tobias, 2021. "Who is watching me? Disentangling audience and interpersonal closeness effects in a Pay-What-You-Want context," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
  • Handle: RePEc:eee:soceco:v:90:y:2021:i:c:s2214804320306741
    DOI: 10.1016/j.socec.2020.101631
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    More about this item

    Keywords

    Social preferences; Experiments; Social image concerns; Pay-What-You-Want; Interpersonal closeness;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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