Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68231
Authors: 
Regner, Tobias
Riener, Gerhard
Year of Publication: 
2012
Series/Report no.: 
DICE Discussion Paper 82
Abstract: 
The emergence of Pay-What-You-Want (PWYW) business models as a successful alternative to conventional uniform pricing brings up new questions related to the task of pricing. We investigate the effect of a reduction of privacy on consumers' purchase decisions (whether to buy, and if so how much to pay) in a natural experiment at an online music store with PWYW-like pricing. Our study extends the empirical evidence of the reduced anonymity effect, previously established for donation or public goods contexts, to a consumption environment. We find that revealing the name of the customer led to slightly higher payments, while it drastically reduced the number of customers purchasing. Overall, the regime led to a revenue loss of 15%. The experiment suggests that even low levels of social pressure without face to face interaction on customers leads to a reduction of welfare.
Subjects: 
Digital content
Voluntary Payments
PWYW
Public goods
Voluntary contributions
Social pressure
Internet
Privacy
Natural experiment
JEL: 
D03
D49
H41
L82
L86
P14
ISBN: 
978-3-86304-081-9
Document Type: 
Working Paper

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