Pay-what-you-want, identity, and self-signaling in markets

Ayelet Gneezy, Uri Gneezy, Gerhard Riener, and Leif D. Nelson
PNAS May 8, 2012 109 (19) 7236-7240; https://doi.org/10.1073/pnas.1120893109

  1. Edited* by George A. Akerlof, University of California, Berkeley, CA, and approved March 19, 2012 (received for review December 20, 2011)

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.

Footnotes

  • ↵1To whom correspondence should be addressed. E-mail: agneezy{at}ucsd.edu.
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Pay-what-you-want, identity, and self-signaling
Ayelet Gneezy, Uri Gneezy, Gerhard Riener, Leif D. Nelson
Proceedings of the National Academy of Sciences May 2012, 109 (19) 7236-7240; DOI: 10.1073/pnas.1120893109
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