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The strength of the anchoring effect on Pay What You Want payments: Evidence from a vignette experiment

Author

Listed:
  • Anna Kukla-Gryz

    (Faculty of Economic Sciences, University of Warsaw)

  • Katarzyna Zagórska

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

The goal of this paper is to empirically investigate, on the example of eBooks, the effects of the expected quality, external and internal reference prices, risk-taking propensity and perceived costs of production on the size of the voluntary payments in pay-what-you-want (PWYW) scheme. Using the results of a vignette experiment, we show that independently from the expected quality of the eBook, when individual internal reference price is higher than external reference price, voluntary payments are significantly higher if external reference price is not provided. When the external reference price is not provided then PWYW payments depend positively on consumers’ individual internal reference price, and the perceived percentage of the price believed to cover the author’s compensation and the publication costs. The originality of the research comes from separating the anchoring effect of external reference prices from the quality signal effect.

Suggested Citation

  • Anna Kukla-Gryz & Katarzyna Zagórska, 2017. "The strength of the anchoring effect on Pay What You Want payments: Evidence from a vignette experiment," Working Papers 2017-14, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2017-14
    as

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    File URL: https://www.wne.uw.edu.pl/index.php/download_file/3618/
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    References listed on IDEAS

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    More about this item

    Keywords

    Laffer curve; tax evasion; labor market duality;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Z19 - Other Special Topics - - Cultural Economics - - - Other
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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