Pay-what-you-want, identity, and self-signaling in markets
Abstract
We investigate the role of identity and self-image consideration under "pay-what-you-want" pricing. Results from three field experiments show that often, when granted the opportunity to name the price of a product, fewer consumers choose to buy it than when the price is fixed and low. We show that this opt-out behavior is driven largely by individuals' identity and self-image concerns; individuals feel bad when they pay less than the "appropriate" price, causing them to pass on the opportunity to purchase the product altogether.
- Publication:
-
Proceedings of the National Academy of Science
- Pub Date:
- May 2012
- DOI:
- 10.1073/pnas.1120893109
- Bibcode:
- 2012PNAS..109.7236G