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Research Article

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

Ayelet Gneezy, Uri Gneezy, Gerhard Riener, and Leif D. Nelson
  1. aRady School of Management, University of California at San Diego, La Jolla, CA 92093;
  2. bCenter for Research in Experimental Economics and Political Decision Making (CREED), University of Amsterdam, 1018 WB, Amsterdam, The Netherlands;
  3. cDeutsche Forschungsgemeinschaft Research Training Group, Economics of Innovative Change, Friedrich Schiller University Jena, 07743 Jena, Germany;
  4. dMax Planck Institute of Economics, 07743 Jena, Germany; and
  5. eHaas School of Business, University of Cailfornia, Berkeley, CA 94720

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PNAS May 8, 2012 109 (19) 7236-7240; https://doi.org/10.1073/pnas.1120893109
Ayelet Gneezy
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  • For correspondence: agneezy@ucsd.edu
Uri Gneezy
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Gerhard Riener
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Leif D. Nelson
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  1. Edited* by George A. Akerlof, University of California, Berkeley, CA, and approved March 19, 2012 (received for review December 20, 2011)

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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.

  • fairness
  • social preferences
  • behavioral pricing

Footnotes

  • ↵1To whom correspondence should be addressed. E-mail: agneezy{at}ucsd.edu.
  • Author contributions: A.G., U.G., G.R., and L.D.N. designed research, performed research, analyzed data, and wrote the paper.

  • The authors declare no conflict of interest.

  • ↵*This Direct Submission article had a prearranged editor.

  • This article contains supporting information online at www.pnas.org/lookup/suppl/doi:10.1073/pnas.1120893109/-/DCSupplemental.

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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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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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Proceedings of the National Academy of Sciences: 109 (19)
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