People Pay More When They Pay-It-Forward

Minah H. Jung, University of California Berkeley, USA
Leif D. Nelson, University of California Berkeley, USA
Ayelet Gneezy, University of California San Diego, USA
Uri Gneezy, University of California San Diego, USA
How will a customer respond when a company abandons fixed prices in favor of “donations” or “gifts”? In three studies we compare behaviors under Pay-It-Forward pricing to those under the economically identical Pay-What-You-Want pricing, and find consistent evidence suggesting that people want to pay more under the former.
[ to cite ]:
Minah H. Jung, Leif D. Nelson, Ayelet Gneezy, and Uri Gneezy (2012) ,"People Pay More When They Pay-It-Forward", in NA - Advances in Consumer Research Volume 40, eds. Zeynep Gürhan-Canli, Cele Otnes, and Rui (Juliet) Zhu, Duluth, MN : Association for Consumer Research, Pages: 121-124.