Pay-What-You-Want pricing schemes: A self-image perspective
(2015) In Journal of Behavioral and Experimental Finance 7. p.17-28- Abstract
- Pay-What-You-Want (PWYW) pricing schemes are becoming increasingly popular. We develop a model incorporating self-image into the buyer’s utility function and introduce heterogeneity in consumption utility and image-sensitivity, generating different purchase decisions and optimal prices across individuals. When a good’s fixed price is lower than a threshold fair value, PWYW can lead to a lower utility. This may result in a lower purchase rate and higher average price, accounting for previously unexplained field experimental evidence. An increase in the threshold value decreases the buyer’s utility and may further lower the purchase rate, resulting in a further increase in purchase price.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/7861186
- author
- Kahsay, Goytom Abraha and Samahita, Margaret LU
- organization
- publishing date
- 2015
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Pay-What-You-Want, Self-image, Fairness, Voluntary contribution
- in
- Journal of Behavioral and Experimental Finance
- volume
- 7
- pages
- 17 - 28
- publisher
- Elsevier
- external identifiers
-
- scopus:84934875201
- ISSN
- 2214-6350
- DOI
- 10.1016/j.jbef.2015.05.001
- language
- English
- LU publication?
- yes
- id
- 9e71449f-53ef-4400-8cc0-21676b9fd0c8 (old id 7861186)
- date added to LUP
- 2016-04-01 14:49:37
- date last changed
- 2022-03-06 21:25:12
@article{9e71449f-53ef-4400-8cc0-21676b9fd0c8, abstract = {{Pay-What-You-Want (PWYW) pricing schemes are becoming increasingly popular. We develop a model incorporating self-image into the buyer’s utility function and introduce heterogeneity in consumption utility and image-sensitivity, generating different purchase decisions and optimal prices across individuals. When a good’s fixed price is lower than a threshold fair value, PWYW can lead to a lower utility. This may result in a lower purchase rate and higher average price, accounting for previously unexplained field experimental evidence. An increase in the threshold value decreases the buyer’s utility and may further lower the purchase rate, resulting in a further increase in purchase price.}}, author = {{Kahsay, Goytom Abraha and Samahita, Margaret}}, issn = {{2214-6350}}, keywords = {{Pay-What-You-Want; Self-image; Fairness; Voluntary contribution}}, language = {{eng}}, pages = {{17--28}}, publisher = {{Elsevier}}, series = {{Journal of Behavioral and Experimental Finance}}, title = {{Pay-What-You-Want pricing schemes: A self-image perspective}}, url = {{http://dx.doi.org/10.1016/j.jbef.2015.05.001}}, doi = {{10.1016/j.jbef.2015.05.001}}, volume = {{7}}, year = {{2015}}, }