Abstract:

As a new participative pricing mechanism, PWYW pricing delegates the whole price determination to consumers. Previous empirical research has showed that PWYW pricing increases sellers’ profits, even when consumers can self-determine the price, which conflicts with the basic assumption of economic man in traditional economics. Thus, some other drivers must play a role when the PWYW price is determined. Based on social preference theory, we study the influences of altruism, fairness, reciprocity, sense of guilt and price consciousness on consumers willingness to pay under PWYW pricing mechanism, the study show that reciprocity, fairness and price consciousness have a positive impact on consumer’s willingness to pay, besides, these impacts are moderated by the way of transactions.

Key words: Participative Pricing, PWYW Pricing Mechanism, Reciprocity, Fairness, Price Consciousness