Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85035
Authors: 
Regner, Tobias
Riener, Gerhard
Year of Publication: 
2013
Series/Report no.: 
Jena Economic Research Papers 2013-032
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 eect 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 eect, previously established for donation or public goods contexts, to a consumption environment. We nd 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
Internet
natural experiment
privacy
public goods
PWYW
social pressure
voluntary contributions
voluntary payments
JEL: 
D03
D49
H41
L82
L86
P14
Document Type: 
Working Paper

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