Pay-what-you-want or mark-off-your-own-price – A framing effect in customer-selected pricing

B-Tier
Journal: Journal of Behavioral and Experimental Economics
Year: 2015
Volume: 57
Issue: C
Pages: 200-204

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We conduct a natural field experiment to test for the effect of framing on prices paid in two customer-selected price mechanisms. In two framing conditions, we sell a soft drink and provide customers with a reference price for this drink. In the pay-what-you-want (PWYW) condition, customers are told that they can pay much as they want. In the mark-off-your-own-price (MOYOP) condition, customers are told that they can reduce the price by as much as they want. We find that prices are significantly lower and that more customers choose a price of zero in the MOYOP compared to the PWYW condition. We conjecture that the explicit request to reduce the price in MOYOP is a strong signal for customers to adjust their perception of the appropriate price downwards.

Technical Details

RePEc Handle
repec:eee:soceco:v:57:y:2015:i:c:p:200-204
Journal Field
Experimental
Author Count
3
Added to Database
2026-01-29