Article

Journal of Marketing
2021, Vol. 85(5) 145–160
The Control–Effort Trade-Off in ª American Marketing Association 2021
Article reuse guidelines:

Participative Pricing: How Easing Pricing sagepub.com/journals-permissions

DOI: 10.1177/0022242921990351
journals.sagepub.com/home/jmx
Decisions Enhances Purchase Outcomes

Cindy Xin Wang, Joshua T. Beck, and Hong Yuan

Abstract
Participative pricing strategies may influence consumer purchase decisions; this research proposes specifically that firms’
delegation of pricing decisions to consumers can create a control–effort trade-off. Consumers favor greater pricing control but
are deterred by the effort involved in deciding what to pay. Strategies such as pay what you want in turn might reduce purchase
intentions due to the effort involved. In contrast, strategies that increase feelings of control but not perceived effort, such as pick
your price options that let consumers choose from a limited set of prices, could enhance pricing outcomes. A field study and four
laboratory experiments confirm these propositions. The findings demonstrate the mixed effects of participative pricing, identify
mediating mechanisms that explain these effects, and specify common moderating conditions that shape the outcomes of
participative pricing. These results have notable implications for pricing theory and practice.

Keywords
control, effort, pay what you want, pick your price, pricing
Online supplement: https://doi.org/10.1177/0022242921990351

In most purchase situations, the price is fixed, and consumers
choose to take it or leave it. But marketers have begun experi-
menting with pricing strategies that delegate some or all of the
price determination task to consumers. Such participative
pricing strategies, in which “consumers participate in setting
a final price for a product” (Chandran and Morwitz 2005,
p. 249), can engage consumers, boost sales, enhance brand loy-
alty, and contribute to competitive positions (Chen, Koenigsberg,
and Zhang 2017; Spann and Tellis 2006). Yet many firms—
including Priceline (Bhattarai 2016), Panera Bread (Houck
2019), and the Metropolitan Museum of Art in New York
(Welss 2018)—that have experimented with participative pricing
also have abandoned it and reverted to fixed prices. We critically
examine participative pricing to understand how and in which
conditions it might enhance purchase outcomes.
In particular, we theorize about a tension that consumers
experience when evaluating a purchase situation that involves
participative pricing. Consumers’ participation in determining
the final price triggers a sense of greater pricing control
(a positive purchase driver) but also feelings of more signifi-
cant pricing effort (a negative purchase driver). Building on
this proposition, we predict an overall negative effect of a pay
what you want (PWYW) pricing strategy because of the high
effort involved in deciding the final price. We also predict an
overall positive effect of a novel pick your price (PYP) strat-
egy, which allows consumers to choose a price from a set of
options (Ismael 2017). Both PWYW and PYP enhance feelings
of pricing control, but PYP does not increase pricing effort,
because consumers find it relatively easy to make constrained
choices (Chernev, Böckenholt, and Goodman 2015).
Using this control–effort framework, we investigate the
effects of PWYW and PYP across five studies in a variety of
purchase contexts. Study 1 establishes the strong performance
of PYP relative to fixed prices and PWYW in a field quasi-
experiment that involves actual purchases and outlines profit
implications. Study 2 indicates that compared with a fixed
price, PWYW decreases purchase intentions due to the high
effort required, even though it confers full pricing control. In
contrast, PYP provides a sense of pricing control but does
not affect pricing effort, so it increases purchase intentions.
Cindy Xin Wang is Assistant Professor of Marketing, Orfalea College of
Business, California Polytechnic State University, USA (email: cwang96@
calpoly.edu). Joshua T. Beck is Associate Professor of Marketing, Lundquist
College of Business, University of Oregon, USA (email: jbeck2@uoregon
.edu). Hong Yuan is Richard P. Booth Associate Professor of Marketing and
Research Scholar, Lundquist College of Business, University of Oregon, USA
(email: hongy@uoregon.edu).
146
These effects hold regardless of the price level. Study 3 demon-
strates that shopping motives (to save money or time) moderate
the effects of effort and control on purchase intentions.
Whereas PWYW is more effective than a fixed price when
consumers are motivated to save money, PYP is more effective
in general. When consumers are motivated to save time, PYP is
just as effective as a fixed price and more effective than
PWYW. Study 4 directly manipulates pricing effort and control
while holding the pricing strategy (PYP) constant to validate
the underlying process. Study 5 identifies single (vs. multiple)
purchase decisions as a crucial moderating condition, such that
the positive effect of PYP on purchase choice attenuates over
multiple purchase decisions, which require a great deal of effort.
The current research thus makes several contributions to
pricing literature. First, we explicate the mixed effectiveness
of participative pricing strategies by examining psychological
mechanisms that drive their effects. Second, we test a novel
form of participative pricing (PYP) and show that providing
consumers with price options can enhance retail purchase out-
comes. Although PYP has been used in various forms in non-
profit and tipping contexts, it has not been tested in a for-profit
context or compared with other participative pricing strategies.
In exploring PWYW and PYP, we conceptualize pricing con-
trol and pricing effort and empirically test our control–effort
trade-off framework. Previous research has focused mainly on
explaining why consumers would pay more than $0 and iden-
tified social factors, such as altruism, fairness, and price con-
sciousness, that determine the price paid (Kim, Natter, and
Spann 2009; Schmidt, Spann, and Zeithammer 2015). We
advance this stream of literature by demonstrating a key role
of pricing effort, which can deter consumers from making
PWYW purchases. Third, we show that participative pricing
strategies perform differently in various contexts, such as when
consumers are motivated to save time versus money and make
single versus multiple purchase decisions. The framework thus
provides practical guidance for enhancing the purchase out-
comes of participative pricing strategies in the marketplace.
Conceptual Development
Prices are often fixed before the point of sale, whereas partici-
pative pricing delegates some or all of the price determination
to the consumer (Kim, Natter, and Spann 2009). Forms of
participative pricing have been in use for millennia (e.g., auc-
tions date back to 500 BCE; Krishna 2002), and today, they
appear in various business models adopted by restaurants,
musicians, gaming companies, travel providers, charities, and
others (Charness and Cheung 2013; Thomaselli 2012;
Tyrangiel 2007; Warren, Hanson, and Yuan 2021).
PWYW and PYP as Participative Pricing Strategies
Prior marketing literature suggests that how participative pric-
ing is presented to consumers matters (Krishna et al. 2002).
Participative pricing also comes in many forms, including auc-
tions, reverse auctions, exchanges, negotiations, name your
Journal of Marketing 85(5)
own price, and PWYW (for a review, see Kim, Natter, and
Spann [2009]). In its unique approach, PWYW involves one
buyer and one seller (vs. auctions, which involve many buyers),
and the seller must take whatever price is selected (vs. negoti-
ations, where sellers can counter). This full delegation of price
determination can be exciting for consumers and risky for
firms. In a sense, PWYW is the most participative option;
consumers have full say over the final price, and because they
might choose to pay $0, firms worry about the performance
implications. Yet marketers grew increasingly interested in
PWYW after the popular and successful 2007 launch of a
PWYW-priced album by the band Radiohead (Tyrangiel
2007). Research since then has characterized PWYW as a novel
and attractive pricing strategy (e.g., Gneezy et al. 2010; Kim,
Natter, and Spann 2009).
Challenges of PWYW. Despite PWYW’s initial successes, many
firms that adopted it have reverted to fixed-price models: Price-
line abandoned PWYW pricing for airfares in 2016 (Bhattarai
2016), Panera Bread closed its last remaining PWYW restau-
rant in Boston (Houck 2019), and the Metropolitan Museum of
Art in New York ended its PWYW ticket policy in 2018, when
the museum president and chief executive officer Daniel H.
Welss (2018, p. 1) described the strategy as “no longer suffi-
cient to meet the Museum’s daily operational demands.”
Lower-than-expected payments may have caused some rever-
sions. For example, PWYW is more effective when consumers
are motivated by fairness (Gerpott and Schneider 2016), charity
(Gneezy et al. 2010), or relational concerns (Stangl, Kastner,
and Prayag 2017). In addition, offering a reference price may
cause consumers to pay only that or below that price because
paying above it seems irrational. Finally, consumers simply
appear reluctant to pay for some PWYW offerings.
However, PWYW is not just challenging for firms; it also
can be difficult for consumers. We theorize that two fundamen-
tal tensions exist for consumers. First, they are attracted to the
economically advantageous pricing terms (i.e., pay anything,
including $0), which permits them to maximize their utility.
Second, consumers must decide the final price, which takes
effort; even though a $0 payment is an option, it often is not
in the best interest of the long-term exchange (i.e., consumers
understand that sellers need revenue to maintain their ongoing
operations). Moreover, paying a price that appears socially
inappropriate may have adverse reputational effects (e.g., they
may be viewed as cheap). Thus, consumers must weigh the
benefits of pricing control against the costs of pricing effort.
We refer to these countervailing forces as the control–effort
trade-off.
Pick your price (PYP) as a novel strategy. PYP, which asks con-
sumers to choose the price they prefer to pay from multiple
price options, has not been studied formally in pricing litera-
ture. We regard it as an evolution of PWYW, in that consumers
still have the final say over the price, but they do not have to
generate the price options themselves. This format is increas-
ingly common in charity and tipping contexts. We also note a
Wang et al.
commercial application by Everlane, an online clothing retai-
ler. A well-received “choose what you pay” promotion allowed
shoppers to pick from among three prices when buying a prod-
uct (Ismael 2017). We contend that PYP offers similar benefits
as PWYW (high pricing control) without the accompanying
disadvantages (high pricing effort). If this prediction holds,
PYP should outperform PWYW in many pricing situations and
offer a novel, potentially powerful pricing strategy.
Key Mediating Roles of Pricing Control and Effort
Consumers want pricing control. Consumers have a strong
economic interest in determining a price. We define pricing
control as the perceived level of personal influence over the
process of determining the final price paid for a good or ser-
vice. From a neoclassical economic perspective, consumers
should want the highest pricing control possible to pay the
lowest price possible (i.e., $0) (Allen 1938; Strotz 1955).
Increased feelings of control also have an array of affective
and cognitive psychological benefits (Beck, Rahinel, and Ble-
ier 2020; Koriat, Lichtenstein, and Fischhoff 1980; Langer and
Rodin 1976). Consumers arguably hold favorable attitudes
toward brands that grant them a sense of pricing control
(Henderson, Beck, and Palmatier 2011; Kim, Kaufmann, and
Stegemann 2014). Pricing control also is linked to economic
rewards. Both PWYW and PYP allow consumers to pay cus-
tom prices and offer higher levels of pricing control than fixed
pricing; we posit that pricing control as a positive purchase
driver explains positive outcomes of PWYW and PYP.
Consumers avoid pricing effort. Participative pricing strategies
also trigger pricing effort, or psychological feelings of mental
exertion associated with the price determination. As we have
discussed, if consumers consider only economic utility, they
always pay the lowest price possible, which is an easy decision.
Yet the average prices paid by consumers in PWYW settings
are significantly greater than zero (Kim, Natter, and Spann
2009), suggesting that determining a price is a complex process
shaped by social and psychological factors (Gerpott and
Schneider 2016; Gneezy et al. 2012), including avoiding neg-
ative feelings of guilt or shame for overpaying (wasting money)
or underpaying (appearing cheap) (Kunter 2015). It can be
difficult to arrive at an “appropriate” PWYW price, even with
a reference price, because it is unclear whether a typical pay-
ment is correct (Gerpott and Schneider 2016; Kim, Kaufmann,
and Stegemann 2014). Because PWYW involves limitless pay-
ment options, it also might prompt busy consumers with lim-
ited mental resources to opt out of the decision and avoid
purchasing (Iyengar and Lepper 2000). Such consumers may
be more likely to accept a fixed price from a competing seller
rather than paying the same or even a lower price under
PWYW (Gneezy et al. 2012). We present pricing effort as a
negative driver that explains the negative impact of PWYW on
purchase intentions. To compare PWYW with PYP, we thus
distinguish conceptually between control and effort: control
involves a situational evaluation (how much control do
147
I have over prices?), whereas effort involves the use of cogni-
tive resources (how effortful is it to think about price?).
Because PYP involves selecting from among several
options, it should not demand as much pricing effort. Studies
of choice difficulty provide a useful analog: consumers claim
they want many choice options but also experience “choice
overload” when trying to select from among a vast assortment
(Chernev, Böckenholt, and Goodman 2015; Schwartz 2004). In
a participative pricing context, with maximal pricing control,
determining the price is akin to making a selection from a large
set of options (e.g., should a cookie cost $.50, $.75, $1.00,
$1.25, $1.50, $1.75 . . . ?). Rather than leaving the price com-
pletely open-ended, a firm could reduce the required pricing
effort by asking consumers to pick from a limited number of
pricing options. The effort required to make such a decision
may be the same or slightly more than the evaluation of a fixed
price. In summary, we predict that PWYW generally underper-
forms fixed pricing and PYP due to the greater pricing effort it
demands, which overwhelms the benefits of the greater pricing
control it offers; in contrast, PYP should generally outperform
fixed pricing and PWYW because it primarily increases pricing
control. Formally:
H1: Relative to fixed price, (a) PWYW generally reduces
and (b) PYP generally increases purchase intentions.
H2: Relative to a fixed price, (a) PWYW and (b) PYP
increase consumers’ feelings of pricing control, and
(c) PWYW increases consumers’ feelings of pricing
effort.
H3: (a) The negative effect of PWYW (vs. fixed price) on
purchase intentions is mediated by pricing effort, whereas
(b) the positive effect of PYP (vs. fixed price) on purchase
intentions is mediated by pricing control.
How Shopping Motives Shape the Control–Effort
Trade-Off
Building on this framework, we consider several moderating
factors that may shape the (dis)advantages of PWYW and PYP.
Consumers often approach purchase decisions with different
motives, such as convenience, greater selection, lower prices,
unique offerings, or support for local merchants (Darden and
Reynolds 1971; Jasper and Lan 1992; Jin, He, and Zhang
2014). In this process, saving time and saving money are com-
mon decision motives (Duxbury et al. 2005).
When consumers are motivated to save money, they focus
their attention on their level of control over the price, because
higher pricing control allows consumers to save more. The
perceptions of pricing effort are minimized, as consumers are
already willing to expend effort to save money (Xia,
Kukar-Kinney, and Monroe 2010). Money-saving promotions,
such as coupons, require consumer effort (Schneider and Cur-
rim 1991), yet consumers are enticed by the incentives
(Mulhern and Padgett 1995). Coupon promotions even increase
the number of shopping trips to stores (Walters and Rinne
1986). Thus, consumers motivated to save money likely focus
148
more on pricing control and less on pricing effort, such that the
negative effect of PWYW on consumer purchases should be
attenuated. Then, both PWYW and PYP should increase pur-
chase intentions because they elicit high pricing control.
Formally:
H4: The motivation to save money moderates the effect of
PWYW and PYP on purchase intentions, such that when
consumers are motivated to save money, both (a) PYP
and (b) PWYW have positive effects on purchase inten-
tions, compared with a fixed price.
If, instead, consumers are motivated to save time, their focus
may shift away from pricing control and toward pricing effort.
The process of making a purchase decision, especially if it
entails extra effort, can be time consuming and exhausting; it
even can reduce consumers’ brand loyalty and fairness percep-
tions (Mehta, Rajiv, and Srinivasan 2003; Xia, Kukar-Kinney,
and Monroe 2010). Consumers prefer quick, convenient, and
less effortful purchase decisions, particularly when they are
more motivated to save time (Childers et al. 2011; Johnson and
Goldstein 2003). Expending effort instead demands time and
resources. Therefore, PWYW should be less effective than PYP
or fixed pricing when consumers are motivated to save time, as
the motive to save time minimizes consumers’ focus on pricing
control and may enhance their focus on pricing effort, which
could nullify some benefits of PYP. We propose the following:
H5: The motivation to save time moderates the effect of
PWYW and PYP on purchase intentions, such that when
consumers are motivated to save time, (a) PYP and fixed
price have similar effects but (b) PWYW has a negative
effect on purchase intentions compared with a fixed price.
How Shopping Context Shapes the Control–Effort
Trade-Off
Beyond shopping motives, it is important to note that the shop-
ping context also influences the effect of PYP on purchase
outcomes. A shopping trip might involve a single or multiple
purchase decisions, depending on consumers’ shopping goals
and purposes (Arentze, Oppewal, and Timmermans 2005;
Harlam and Lodish 1995). Multiple purchases in a shopping
trip incur more effort because they require multiple decisions,
involving a large number of choices. Evaluating perceived risk
and uncertainty across multiple items also increases the level of
effort required (Bettman, Luce, and Payne, 1998; Schwartz
2004). Although the pricing effort of PYP remains low for an
individual product, the evaluation of multiple price options for
multiple products can become more effortful in aggregate.
When consumers are involved in multiple purchases, they
likely try to preserve mental resources to make all the needed
purchase decisions, instead of expending unnecessary effort on
each item, even if that effort might lead to more favorable
prices and more satisfying experiences. Therefore, we expect
that when multiple purchases are involved, the effect of PYP is
attenuated. Formally:
Journal of Marketing 85(5)
H6: The number of purchase decisions moderates the
effect of PYP versus fixed price on purchase intentions,
such that the positive effect of PYP on purchase inten-
tions is attenuated after multiple purchase decisions.
To test these hypotheses, we conduct five studies (one field
quasi-experiment and four laboratory experiments) that collec-
tively confirm our theoretical framework (see Figure 1) and
demonstrate how PWYW and PYP distinctly shape consumer
purchases.
Study 1
We examine the effects of PWYW and PYP in a field experi-
ment, with an emphasis on how PYP may enhance purchases
and revenue. Consistent with H1, we expect PYP to outperform
both PWYW and fixed pricing. In a retail setting, we manipu-
lated the pricing strategy and measured the number of units
sold and revenues. Specifically, we partnered with a bakery
chain and varied the pricing strategy for one of its core prod-
ucts: freshly baked cookies.
Methods
Quasi-experimental design. The study relied on random varia-
tions of three pricing strategies (PYP, PWYW, and fixed price)
at 50-minute intervals for 15 business hours (5 total hours per
strategy) throughout three afternoons. The interval was deter-
mined by the store hours, trained staff members’ working sche-
dules, and the goal of ensuring even time allocations of all
pricing conditions. Consumers self-selected into the study by
entering the store.
Procedure and measures. The popular bakery offers traditional
baked goods (e.g., pastries, muffins, cakes), including freshly
baked cookies priced at $.60 each. For this study, the bakery
agreed to vary its cookie pricing strategy to test the effect on
sales. No other promotions occurred during this time. The study
ran during regular business hours, from 1:00 P.M. to 6:00 P.M.,
for three days (Thursday, Friday, and Saturday; 15 hours total).
Employees were trained as confederates but were blind to the
hypotheses. The pricing strategy was manipulated by signage.
In the PWYW condition, consumers were instructed to “pay
what you want” (no reference price). In the fixed-price condi-
tion, cookies were priced at the usual $.60 each. In the PYP
condition, consumers were asked to “pick your price” and pro-
vided four prices from which to choose ($.45, $.55, $.65, $.75),
which averaged $.60. See study materials and measures for this
and following studies in the Web Appendix.
In each condition, the signage was displayed for an equal
amount of time. To approximate a random assignment, the staff
changed the pricing strategy in randomly determined
50-minute intervals. The staff were careful to ensure that con-
sumers were unaware of the change. The retailer recorded the
unit sales and cookie revenue generated in each condition,
which served as our primary dependent variable, and kept a
log of questions and comments as a source of qualitative data.
Wang et al.
Shopping Context
Multiple
Purchases
Participative
Pricing Strategy
+ −
Pay What You Want
(PWYW)
Pick Your Price + Pricing Control
(PYP)
+ + + +
Motivation to Motivation to
Save Time Save Money
Shopping Motives
Figure 1. Conceptual model.
Results
The retailer sold 526 units and generated $260 in revenue from
cookie sales (Figure 2). To understand the role of pricing strat-
egy, we first examined whether the pricing condition affected
units sold by calculating the proportion in each pricing condi-
tion as a percent of the total units sold across conditions.
A chi-square test of proportions revealed a significant differ-
ence in proportion by pricing condition (fixed price ¼ 30.80%,
PWYW ¼ 22.43%, PYP ¼ 46.77%; w2 ¼ 49.72, p < .001). The
store sold more units in the PYP condition than the fixed-price
condition (w2 ¼ 17.67, p < .01) or the PWYW condition
(w2 ¼ 46.43, p < .001). In addition, PWYW resulted in fewer
units sold than did fixed pricing (w2 ¼ 7.25, p < .01). Units
purchased in the PYP condition generated revenues of $122.10,
compared with $40.70 in the PWYW and $97.20 in the
fixed-price conditions. The business did not share cost informa-
tion, but with a conservative assumption of 33% variable costs
($.20 per cookie), the profits in the PYP condition are higher
($73.36) than in the fixed price ($64.80) and PWYW ($16.90)
conditions. In this calculation, PYP increased profits by 13%
relative to fixed prices and by 334% relative to PWYW.
The average price paid by participants in the PYP condition
was $.50 per unit (vs. $.34 in PWYW and $.60 in fixed price).
That is, participants in the PWYW condition purchased fewer
units and also paid lower prices (F(2, 523) ¼ 521.10, p < .001).
See price paid details in the Web Appendix. The qualitative
data also provide some insights into consumers’ reactions to the
pricing strategies. First, the PWYW strategy results in greater
pricing effort, such that consumers voiced questions such as,
“What price should I pay?” and “What price do other people
149
Pricing
Mechanism
+ Pricing Effort
Purchase
Outcomes
+
+
tend to pay?” Second, employees anecdotally reported that
consumers spent a longer time thinking about the transaction,
whereas they responded more quickly and decisively in the
PYP condition.
Comparison with a Traditional Sales Promotion
Because the average price in the PYP condition was $.50 per
unit (vs. the usual price of $.60 per unit), the PYP strategy
arguably may have generated more unit sales merely due to
lower prices. We instead propose that the effects are driven by
greater pricing control, paired with an appropriate amount of
required effort (choosing rather than forming the price). To
explore these two possibilities, we collected additional data
in a discount condition in the same setting and priced the
cookies at $.50 highlighted by a sign that also indicated the
regular price of $.60. The PYP condition in the main study
still outperforms the fixed discount price in this study (with
the caveat that these data were collected a week apart): A $.50
discounted price generated 203 unit sales (cf. 246 sold with
PYP; w2 ¼ 4.30, p < .05). We also recorded the units sold the
next day, during the same experimental window (1:00–6:00
P.M.) but without a prominent pricing sign, as an additional
control condition. The bakery generated 161 unit sales, nearly
identical to the amount sold in the fixed-price condition in the
main study (162 units, w2 ¼ .003, p ¼ .96).
Discussion
Study 1 provides initial support for our proposed framework.
Consistent with H1, we find that, relative to a conventional
150
$140.00
Pay What You Want
16% Fixed Price $120.00
22%
$100.00
$80.00
$60.00
Pick Your Price
34% Discount
Price $40.00
28%
$20.00
Proportion of Units Sold by
$-
Pricing Strategy
Figure 2. Study 1: effect of pricing strategies on sales performance.
fixed price, PWYW has a negative effect on purchase inten-
tions, whereas PYP has a positive effect. Sales records show
that PYP outperforms all other pricing strategies, with 108%
more units sold than PWYW, 52% more units than the fixed
price (as typically used by the store), and 21% more units than a
discount strategy. Although consumers paid slightly less on
average ($.50 vs. $.60), the significant sales increase in the
PYP, relative to the discount, condition demonstrates the strong
potential of PYP pricing strategies. Notably, the negative
effects of PWYW emerged despite a lack of reference price,
suggesting that consumers were not simply paying at or below
a reference price.
Although we could not measure consumer control and effort
directly in Study 1, the anecdotal evidence suggests that
consumers viewed PWYW as more effortful and asked more
questions about it. The purchase differences between PWYW
and PYP also indicate that PYP increases purchases and profits
by enhancing pricing control (relative to fixed price) but alle-
viates pricing effort (relative to PWYW).
Study 2
Study 2 has several goals. First, with a lab experiment, we
further validate our core predictions that, relative to a
fixed-price strategy, consumers are more likely to purchase
when they can use PYP and less likely to do so using PWYW.
Second, we test the generalizability of these effects across high
and low price levels. Third, to gain insights into the underlying
process, we include measures of pricing control and pricing
effort. We predict that PWYW enhances perceived pricing con-
trol (H2a) and effort (H2b), whereas PYP enhances pricing con-
trol (H2c) but has no discernible impact on pricing effort. We
further predict that pricing effort relates negatively, and pricing
control relates positively, to purchase intentions. We test these
Journal of Marketing 85(5)
Revenue Generated by Pricing Strategy
$73.80
$61.20
$64.80
$16.52
$49.20
$40.80
$32.40
$23.60
Fixed Price Discount Price PYP PWYW
Cost Profit
mediating roles of pricing effort and pricing control on pur-
chase intentions (H3) in Study 2. Fourth, we rule out perceived
fairness as an alternative mediator. Bidding is generally per-
ceived as fairer than retailer-set prices (Haws and O’Bearden
2006), and consumers might view PYP or PWYW as similar
to bidding; we ultimately do not find evidence for this role,
though.
Methods
Participants and design. This study used a 3 (pricing strategy:
PWYW, PYP, fixed price)  2 (price level: high, low)
between-subjects design. We recruited 382 U.S. adults
(Mage ¼ 35.62 years; 41.4% female) from Amazo Mechanical
Turk (MTurk) for a nominal payment. They read about a ficti-
tious genetic testing service (Zyntech) and rated their purchase
intentions. Participants then completed postsurvey measures
and were thanked.
Procedure and measures. The pricing strategy and price-level
manipulations were embedded in the service description.
Half of the participants were assigned to the high-price condi-
tion. Among this group, those assigned to the fixed-price con-
dition read that the price was $199; those in the PWYW
condition read that most consumers pay $199, but they could
pay any amount they felt was appropriate; and those in the PYP
condition read that they could choose a price to pay from a list
($189, $199, or $209). For the other half, assigned to the
low-price condition, participants in the fixed-price condition
read that the price was $49; those in the PWYW condition read
that most consumers pay $49, but they could pay any price they
felt was appropriate; and those in the PYP condition read that
they could choose a price to pay from a list ($39, $49, and $59).
In the PYP conditions, the average price thus was equivalent to
Wang et al.
the reference price in the PWYW conditions and the retail price
in the fixed-price conditions.
Participants rated their purchase intentions on a single
seven-point scale item (“How likely are you to purchase
genetic testing from Zyntech?”; 1 ¼ “extremely unlikely,” and
7 ¼ “extremely likely”). They also reported their pricing effort
using three items (“The pricing strategy made me feel like the
decision to purchase this genetic test was an effortful one,”
“The pricing strategy demanded effort for me to reach a pur-
chase decision,” and “Compared to other types of pricing, the
pricing strategy for this product made it easy for me to reach a
purchase decision” [reverse coded]; 1 ¼ “strongly disagree,”
and 7 ¼ “strongly agree”; a ¼ .76). They rated perceived
pricing control using five items (“The way this genetic testing
is priced made me feel like I was in control,” “When deciding
whether or not to get a genetic testing from Zyntech, I felt I was
in control of the price,” “The price of this genetic testing ser-
vice was controlled by me,” “The pricing strategy would
demonstrate how much control I have,” and “The pricing strat-
egy made me feel like I am in control of the price”;
1 ¼ “strongly disagree,” and 7 ¼ “strongly agree”; a ¼ .95).
For perceived fairness, they rated two items (“The pricing
strategy was fair” and “The price was fair”; 1 ¼ “strongly
disagree,” and 7 ¼ “strongly agree”; r ¼ .72) adapted from
Darke and Dahl (2003). Finally, participants provided their
demographic information.
Results
Manipulation checks. Participants completed a pricing strategy
attention check (1 ¼ “one price was offered,” 2 ¼ “pick-your-
price with a list of options,” 3 ¼ “pay whatever you want,” and
4 ¼ “not sure”), which 348 (91.1%) of 382 participants
answered correctly, as well as a price-level attention check
(1 ¼ “more than $100,” 2 ¼ “less than $100,” and 3 ¼ “not
sure”), which 353 (92.4%) participants answered correctly.
Excluding participants who failed the attention checks did not
materially alter the significance of the results, so we report the
results with all participants.
Purchase intentions. We submitted purchase intentions to a 3
(pricing strategy)  2 (price level) analysis of variance
(ANOVA). The results reveal significant main effects of pric-
ing strategy (F(2, 376) ¼ 17.82, p < .001, Z2 ¼ .09) and price
level (F(1, 376) ¼ 7.68, p < .01, Z2 ¼ .02) and a nonsignificant
two-way interaction (F < 1, n.s.). Participants indicate weaker
purchase intentions when the service demands a high price
(M ¼ 3.87, SD ¼ 2.04) rather than a low one (M ¼ 4.39,
SD ¼ 1.88). Across pricing strategies, we observe that purchase
intentions in the PYP condition (M ¼ 4.83, SD ¼ 1.76) are
significantly higher than in the fixed-price (M ¼ 4.07,
SD ¼ 1.95; t(256) ¼ 3.29, p < .01, d ¼ .41) or PWYW
(M ¼ 3.44, SD ¼ 1.98; t(253) ¼ 5.93, p < .001, d ¼ .75)
conditions. They are lower in the PWYW than in the
fixed-price condition (t(249) ¼ 2.54, p < .01, d ¼ .32)
(Table 1). The differences across pricing strategies for the
151
Table 1. Study 2: Means and Standard Deviations of Purchase
Intentions, Pricing Control, and Pricing Effort.
Purchase Intentions Pricing Control Pricing Effort
Mean SD Mean SD Mean SD
Fixed price 4.07 1.95 3.48 1.64 3.36 1.44
PWYW 3.44 1.98 5.26 1.15 4.35 1.62
PYP 4.83 1.76 4.78 1.28 3.64 1.24
high/low price level conditions reveal similar statistical
patterns (i.e., price level does not moderate the effects).
Pricing effort. We submitted pricing effort to a 3 (pricing strat-
egy)  2 (price level) ANOVA. The results reveal a significant
main effect of pricing strategy (F(2, 376) ¼ 16.09, p < .001,
Z2 ¼ .08), a nonsignificant main effect of price level
(F(1, 376) ¼ 1.45, p ¼ .23, Z2 ¼ .004), and a nonsignificant
two-way interaction (F < 1, n.s.). Contrasts reveal that, relative
to the PYP condition (M ¼ 3.64, SD ¼ 1.24), participants
reported similar levels of effort in the fixed-price condition
(M ¼ 3.36, SD ¼ 1.44; t(256) ¼ 1.67, p ¼ .12, d ¼ .21) but
higher pricing effort in the PWYW condition (M ¼ 4.35,
SD ¼ 1.62; t(253) ¼ 3.94, p < .001, d ¼ .50). Pricing effort
is also greater in the PWYW condition than in the fixed-price
condition (t(249) ¼ 5.12, p < .001, d ¼ .65).
Pricing control. We submitted pricing control to a 3 (pricing
strategy)  2 (price level) ANOVA. The results reveal signif-
icant main effects of pricing strategy (F(2, 376) ¼ 56.98,
p < .001, Z2 ¼ .23) and price level (F(1, 376) ¼ 10.04,
p < .01, Z2 ¼ .03) and a nonsignificant two-way interaction
(F < 1, n.s.). Across pricing strategies, pricing control in the
PYP condition (M ¼ 4.78, SD ¼ 1.28) is higher than in the
fixed-price condition (M ¼ 3.48, SD ¼ 1.64; t(256) ¼ 7.11,
p < .001, d ¼ .89) but lower than in the PWYW condition
(M ¼ 5.26, SD ¼ 1.15; t(253) ¼ 3.14, p < .01, d ¼ .39).
Pricing control also is greater in the PWYW than in the
fixed-price condition (t(249) ¼ 9.93, p < .001, d ¼ 1.26). Dif-
ferences across pricing strategies for the high- and low-price
conditions follow similar statistical patterns.
We empirically confirm the discriminant validity of pricing
effort and control (r ¼ .177) by calculating their average var-
iances extracted (AVE). The square of the parameter estimate
for this pair of constructs (phi ¼ .03) is less than the mean of its
AVE estimates (.75), so the two measures are distinct (Fornell
and Larcker 1981). We also report the results of an alternate
regression analysis for each focal outcome for this and remain-
ing studies in the Web Appendix.
Mediation by pricing effort and control. We conducted mediation
analyses with Hayes’s (2017) PROCESS macro (model 4;
10,000 bootstrapped samples), to test the effect of pricing strat-
egy on purchase intentions, using pricing effort and control as
mediators. We coded pricing strategy such that the effects of
PWYW and PYP are relative to those of a fixed-price
152
condition. The positive effect of PYP on purchase intentions is
mediated by pricing control (indirect effect b ¼ .46, SE ¼ .12;
95% confidence interval [CI] ¼ [.24, .71]) but not by pricing
effort (indirect effect b ¼ .09, SE ¼ .06; 95% CI ¼ [.21,
.02]). Alternatively, the effect of PWYW on purchase inten-
tions was mediated by both pricing control (indirect effect
b ¼ .63, SE ¼ .15; 95% CI ¼ [.35, .93]) and pricing effort
(indirect effect b ¼ .33, SE ¼ .09; 95% CI ¼ [.52, .16]).
We further discuss these mediation patterns in the Web
Appendix.
Discussion
Study 2 provides additional support for our proposed frame-
work. Consistent with H1, we find that, relative to a fixed price,
PWYW undermines, whereas PYP increases, purchase inten-
tions, regardless of price level. We also find empirical support
for H2, such that both PWYW and PYP increase consumers’
perceived pricing control (cf. fixed price), and PWYW
increases consumers’ perceived pricing effort. In other words,
PYP elicits greater pricing control but does not affect pricing
effort, relative to a fixed price. The results confirm the mediat-
ing roles of pricing control and pricing effort too (H3). Thus,
PYP enhances purchase intentions through greater pricing con-
trol. For PWYW, we observe mediation by both perceived
control and perceived effort, in countervailing pathways. In
addition, we rule out the perceived fairness (see the Web
Appendix) of the pricing strategy as an alternative explanation
for the outcomes in this and remaining studies.
Study 3
In Study 3, we build on Study 2 findings by examining shop-
ping motives as moderators of the pricing control and effort
pathways. It may be possible to shift consumers’ perception of
pricing control or effort by altering their shopping motives.
When consumers are motivated to save money, they are less
focused on the expenditure of effort (Duxbury et al. 2005;
Kivetz 2003), and control over the price paid helps them
achieve their goal (Charness and Cheung 2013; Kim, Natter,
and Spann 2009). When consumers are motivated to save time,
ease and efficiency are critical (Leclerc, Schmitt, and Dubé
1995; Thaler 1985). Thus, we predict that PWYW and PYP
(vs. fixed price) both increase purchase intentions among
consumers motivated to save money, but PWYW’s effect on
purchase intentions will remain negative among consumers
motivated to save time (H4, H5). To test these effects, we use
a different service category (i.e., insurance).
Methods
Participants and design. This study used a 3 (pricing strategy:
PWYW, PYP, fixed)  3 (motive: save time, save money,
baseline) between-subjects design. We recruited 675 U.S.
adults (Mage ¼ 38.7 years; 41.2% female) from MTurk and
Journal of Marketing 85(5)
paid them a nominal fee. Participants were assigned to one of
nine conditions.
Procedure and measures. Participants first completed a priming
task that manipulated their shopping motives (Cacioppo and
Petty 1981; Gino and Mogilner 2014). Participants in the
save-time (money) condition had to list four to five reasons
that saving time (money) is important when making a purchase
decision. Participants in the baseline condition did not com-
plete any writing task. All participants read a description of
renters’ insurance available from American Family Insurance
Company. The pricing information appeared on the following
page. In the fixed-price condition, participants read that the
price was $180/year. In the PYP condition, they could choose
one of three prices to pay: $140/year, $180/year, or $220/year.
In the PWYW condition, consumers were told they could pay
any price they considered appropriate. Participants then rated
pricing effort (a ¼ .86), pricing control (a ¼ .95), perceived
fairness (r ¼ .79), and purchase intentions. Finally, they
provided demographic information.
Results
Manipulation checks. Participants completed the pricing atten-
tion check from Study 2, and 608 (90.1%) of 675 participants
passed it. They also completed a motive attention check
(1 ¼ “save time,” 2 ¼ “save money,” and 3 ¼ “no writing
task”), which 588 (87.1%) of them passed. The effects did not
change when participants who failed the attention checks were
excluded, so we report the results obtained from all
participants.
Purchase intentions. We submitted purchase intentions to a 3
(pricing strategy)  3 (motive) ANOVA. The results revealed
significant main effects of pricing strategy (F(2, 666) ¼ 9.38,
p < .001, Z2 ¼ .03) and motives (F(2, 666) ¼ 15.11, p < .001,
Z2 ¼ .04). Participants in the PYP condition (M ¼ 4.91,
SD ¼ 1.77) indicate stronger purchase intentions than those in
the fixed-price (M ¼ 4.30, SD ¼ 1.96; t(449) ¼ 3.47, p < .001,
d ¼ .33) or PWYW (M ¼ 4.23, SD ¼ 1.97; t(446) ¼ 3.84,
p < .001, d ¼ .36) conditions. In the fixed-price and PWYW
conditions, we find similar purchase intentions (t < 1, p ¼ .70,
d ¼ .04). When motivated to save time (M ¼ 3.94, SD ¼ 2.03),
participants indicate weaker purchase intentions than those
motivated to save money (M ¼ 4.83, SD ¼ 1.69;
t(447) ¼ 5.04, p < .001, d ¼ .48) or those in the baseline
condition (M ¼ 4.66, SD ¼ 1.92; t(449) ¼ 3.87, p < .001,
d ¼ .37). People motivated to save money and those in the base-
line condition indicate similar purchase intentions (t < 1,
p ¼ .32, d ¼ .09).
We also find a significant two-way (pricing strategy 
motive) interaction (F(4, 666) ¼ 9.44, p < .001, Z2 ¼ .05)
(Figure 3). In the baseline condition, participants in the PWYW
condition (M ¼ 3.95, SD ¼ 2.04) reveal weaker purchase
intentions than those in the fixed-price (M ¼ 4.59,
SD ¼ 1.91; t(148) ¼ 1.98, p < .05, d ¼ .33) and PYP
Wang et al.
6.5
5.39
6.0
5.5 5.03
Purchase Intentions
5.0
4.27
4.5 4.20
4.09
3.36
4.0
3.5
3.0
2.5
2.0
Save Time Save Money
Shopping Motivation
Fixed Price PWYW
Figure 3. Study 3: moderating effects of shopping motives on
purchase intentions.
Notes: Error bars ¼ +1 SEs.
(M ¼ 5.42, SD ¼ 1.49; t(148) ¼ 5.05, p < .001, d ¼ .83)
conditions. In the PYP condition, we find stronger purchase
intentions than in the fixed-price condition (t(150) ¼ 2.99,
p < .01, d ¼ .49), replicating the pattern of effects from Study
2 for the baseline condition. Yet in the save-time condition,
PWYW (M ¼ 3.36, SD ¼ 2.02) results in weaker purchase
intentions than in the fixed-price (M ¼ 4.20, SD ¼ 1.99;
t(148) ¼ 2.57, p < .05, d ¼ .42) or PYP (M ¼ 4.27,
SD ¼ 1.98; t(148) ¼ 2.79, p < .01, d ¼ .46) conditions.
Participants in the PYP and fixed-price conditions indicate
similar purchase intentions (t < 1, p ¼ .83, d ¼ .03). Finally,
in the save-money condition, PWYW participants (M ¼ 5.39,
SD ¼ 1.15) offer stronger purchase intentions than those in the
fixed-price condition (M ¼ 4.09, SD ¼ 1.96; t(149) ¼ 4.96,
p < .001, d ¼ .81), but they are similar to the PYP condition
(M ¼ 5.03, SD ¼ 1.62; t(146) ¼ 1.56, p ¼ .12, d ¼ .26). The
PYP condition also leads to stronger purchase intentions than
the fixed-price condition (t(147) ¼ 3.18, p < .01, d ¼ .52).
Pricing effort. As we detailed in the “Conceptual Development”
section, we predict that consumers’ motivation to save time or
money will alter perceptions of pricing effort and pricing con-
trol. We submitted pricing effort to a 3 (pricing strategy)  3
(motive) ANOVA. The results reveal a significant main effect
of pricing strategy (F(2, 666) ¼ 13.52, p < .001, Z2 ¼ .04), a
nonsignificant main effect of motive (F(2, 666) ¼ 1.05,
p ¼ .35, Z2 ¼ .003), and a significant two-way interaction
(F(4, 666) ¼ 5.69, p < .01, Z2 ¼ .03). Across pricing strategies,
participants exert greater effort in PWYW (M ¼ 4.88,
SD ¼ 1.52) than in the fixed-price condition (M ¼ 4.17,
SD ¼ 1.54; t(449) ¼ 4.93, p < .001, d ¼ .47) and the PYP
condition (M ¼ 4.54, SD ¼ 1.39; t(446) ¼ 2.47, p < .05,
d ¼ .23). Pricing effort also is greater in the PYP than
fixed-price condition (t(449) ¼ 2.67, p < .05, d ¼ .25). Next,
we examine the interaction.
153
In the baseline condition, participants in the PWYW condi-
tion (M ¼ 4.99, SD ¼ 1.35) reported greater pricing effort than
5.42 those in the fixed-price (M ¼ 4.22, SD ¼ 1.52; t(148) ¼ 3.28,
p < .01, d ¼ .54) and PYP (M ¼ 4.25, SD ¼ 1.54;
t(148) ¼ 3.13, p < .01, d ¼ .51) conditions. In the PYP and
4.59
3.95 fixed-price conditions, there was a similar level of pricing
effort (t < 1, p ¼ .94, d ¼ .001), replicating the pattern of
effects from Study 2 for the baseline condition. Yet in the
save-time condition, PWYW (M ¼ 5.00, SD ¼ 1.74) increased
pricing effort relative to the baseline condition (M ¼ 3.64,
SD ¼ 1.62; t(148) ¼ 5.38, p < .001, d ¼ .88) but not the PYP
condition (M ¼ 4.74, SD ¼ 1.35; t(148) ¼ 1.12, p ¼ .26,
d ¼ .18), while participants in the PYP reported higher pricing
Baseline effort than those exposed to the fixed price (t(148) ¼ 4.52,
p < .001, d ¼ .74). Finally, in the save-money condition, pric-
PYP ing effort across all three pricing strategies is similar
(MPWYW ¼ 4.66, SD ¼ 1.43; Mfixed price ¼ 4.63, SD ¼ 1.31;
MPYP ¼ 4.65, SD ¼ 1.23; ts < 1, n.s.).
Pricing control. We submitted pricing control to a 3 (pricing
strategy)  3 (motive) ANOVA, which shows a significant
main effect of pricing strategy (F(2, 666) ¼ 66.37, p < .001,
Z2 ¼ .17), a nonsignificant main effect of motive (F(2, 666) ¼
1.38, p ¼ .25, Z2 ¼ .004), and a significant two-way interaction
(F(4, 666) ¼ 7.07, p < .01, Z2 ¼ .04). Pricing control in the
PWYW condition (M ¼ 5.48, SD ¼ 1.28) is higher than in the
fixed-price condition (M ¼ 4.06, SD ¼ 1.58; t(449) ¼ 10.48,
p < .001, d ¼ .99) and the PYP condition (M ¼ 5.06,
SD ¼ 1.19; t(446) ¼ 3.60, p < .001, d ¼ .34). Pricing control
also is higher in the PYP condition than the fixed-price condi-
tion (t(449) ¼ 7.58, p < .001, d ¼ .72).
In the baseline condition, PWYW (M ¼ 5.56, SD ¼ 1.05)
increased pricing control relative to the fixed-price (M ¼ 4.06,
SD ¼ 1.65; t(148) ¼ 6.62, p < .001, d ¼ 1.09) but not PYP
(M ¼ 5.33, SD ¼ .99; t(148) ¼ 1.38, p ¼ .17, d ¼ .23) condi-
tions. PYP significantly increased pricing control relative to the
fixed-price condition (t(150) ¼ 5.75, p < .001, d ¼ .94), repli-
cating the pattern of effects from Study 2. The pattern was
slightly different in the save-time condition: PWYW
(M ¼ 5.11, SD ¼ 1.58) increased control relative to
fixed-price (M ¼ 4.51, SD ¼ 1.34; t(148) ¼ 2.51, p < .05,
d ¼ .41) but not PYP (M ¼ 4.87, SD ¼ 1.26; t(148) ¼ 1.02,
p ¼ .31, d ¼ .17) conditions. Participants in the PYP condition
reported marginally greater pricing control than those exposed
to a fixed price (t(148) ¼ 1.70, p ¼ .09, d ¼ .28). Finally,
participants revealed the largest difference in pricing condi-
tions in the save-money condition: PWYW (M ¼ 5.76,
SD ¼ 1.07) increased pricing control relative to fixed price
(M ¼ 3.62, SD ¼ 1.61; t(149) ¼ 9.61, p < .001, d ¼ 1.58) and
PYP (M ¼ 4.96, SD ¼ 1.29; t(146) ¼ 4.11, p < .001, d ¼ .68).
PYP also increased control relative to the fixed-price condition
(t(147) ¼ 5.59, p < .01, d ¼ .92).
We again find support for discriminant validity (r ¼ .12); the
square of the parameter estimate between the effort and control
constructs (phi ¼ .01) is less than the mean of the pair’s AVE
(AVE ¼ .80; Fornell and Larcker 1981). In addition, we report
154
the detailed significant moderated mediation results in the Web
Appendix.
Discussion
The results from Study 3 provide evidence in support of H4 and
H5. In the baseline condition, participants indicated higher pur-
chase intentions in the PYP (vs. fixed-price) condition and
lower purchase intentions in the PWYW (vs. fixed-price)
condition. Perceived effort and control mediated these relation-
ships, as in Study 2. Alternatively, when the motive to save
time was activated, PWYW resulted in lower purchase inten-
tions than in the PYP and fixed-price conditions, and purchase
intentions did not differ between PYP and fixed price. In short,
the mediation evidence indicates that the motive to save time
magnified perceptions of effort and reduced the benefits of
PYP, whereas the motive to save money minimized effort and
magnified perceptions of control in a way that bolstered
PWYW and PYP. The results across Studies 1–3 also indicate
that the effects on purchase intentions are robust, regardless of
the presence or absence of a reference price, in the PWYW
condition.
Study 4
Thus far, we have provided process evidence through measured
mediation (pricing effort and control) and situational modera-
tion (motives to save time vs. money), which confirms that the
poor performance of PWYW is due to greater pricing effort,
whereas the superior performance of PYP results from
increased pricing control without a corresponding increase in
effort. In our studies, the PYP conditions include a limited
number of price options (three to four), which minimizes
perceived pricing effort, and an implicit promise to sell the
offering at whatever price the participant selects, which
encourages perceived pricing control. In Study 4, to test the
control–effort trade-off further, we modify the features of the
PYP condition to increase the sense of effort and reduce
the sense of control. We thus can examine how variations in
PYP designs affect its advantages. Finally, we examine movie
ticket sales as the purchase context.
Methods
Participants and design. We recruited 260 U.S. adults
(Mage ¼ 35.45 years; 43.5% female) from MTurk for a nominal
payment. Participants were assigned to one of four pricing
conditions (fixed price, PYP, high-effort PYP, low-control
PYP) in a between-subjects design.
Procedure and measures. Participants first read a description
about a Regal Premiere Movie eTicket 4-Packs, then saw the
pricing information on a subsequent page. In the fixed-price
condition, the pack is listed for $37.99 plus tax. In the PYP
condition, participants read that consumers can choose a price
they want to pay from a list that included $29.99, $37.99, and
$45.99 plus tax. In the high-effort PYP condition, participants
Journal of Marketing 85(5)
reviewed a list of ten price options, ranging from $29.99 to
47.99 in $2 increments. In the low-control PYP condition, they
saw the price options from the PYP condition but also read,
“You can pick your own price from the list below, but the
product may not be available at the price you pick.” Partici-
pants indicated their purchase likelihood and the maximum
amount they would be willing to pay for the tickets. Finally,
participants provided demographic information.
Results
Manipulation checks. We used the three-item pricing effort
(a ¼ .89) and five-item pricing control (a ¼ .95) measures
from Studies 2 and 3. In addition, of the 260 participants,
234 (90.0%) passed the pricing attention check (1 ¼ “One price
was offered,” 2 ¼ “Pick-your-price with a short list of options
[3 options],” 3 ¼ “Pick-your-price with a long list of options
[10 options],” and 4 ¼ “Pick-your-price with a short list of
options [3 options] but product may not be available”). The
effects did not change when we excluded participants who
failed the attention checks, so we report the results with all
participants.
Verifying the effort and control manipulations, a one-way
ANOVA of pricing effort revealed a significant effect of pricing
strategy on perceived effort (F(3, 256) ¼ 4.83, p < .01,
Z2 ¼ .05). The high-effort PYP condition (M ¼ 4.80,
SD ¼ 1.69) significantly increased perceived pricing effort,
relative to the fixed-price (M ¼ 3.94, SD ¼ 1.62;
t(129) ¼ 2.97, p < .01, d ¼ .52), PYP (M ¼ 3.80, SD ¼ 1.61;
t(129) ¼ 3.46, p < .01, d ¼ .61), and low-control PYP (M ¼ 4.08,
SD ¼ 1.65; t(130) ¼ 2.45, p < .05, d ¼ .43) conditions. The
reported levels of pricing effort were similar across the latter
three conditions (ts < 1, n.s.). A one-way ANOVA of pricing
control also showed a significant effect (F(3, 256) ¼ 11.96,
p < .001, Z2 ¼ .12), such that those in the low-control PYP
condition (M ¼ 3.93, SD ¼ 1.73) reported significantly lower
pricing control than those in the PYP (M ¼ 4.78, SD ¼ 1.54;
t(127) ¼ 2.97, p < .01, d ¼ .53) and high-effort PYP
(M ¼ 5.17, SD ¼ 1.51; t(130) ¼ 4.40, p < .001, d ¼ .77)
conditions but similar levels of control to those in the
fixed-price condition (M ¼ 3.69, SD ¼ 1.74; t < 1, n.s.). In
the PYP condition, we find higher pricing control than in the
fixed-price condition (t(126) ¼ 3.76, p < .001, d ¼ .67) but
directionally lower control than in the high-effort PYP condition
(t(129) ¼ 1.45, p ¼ .15, d ¼ .26).
Purchase intentions. We submitted purchase intentions to a
one-way ANOVA. The results reveal a significant main effect
of pricing strategy (F(3, 256) ¼ 4.59, p < .01, Z2 ¼ .05; see the
Web Appendix). That is, participants express higher purchase
intentions in the PYP condition (M ¼ 5.25, SD ¼ 1.46) than in
the fixed-price (M ¼ 4.39, SD ¼ 2.02; t(126) ¼ 2.76, p < .01,
d ¼ .49), high-effort PYP (M ¼ 4.10, SD ¼ 2.01; t(129) ¼ 3.70,
p < .001, d ¼ .65), and low-control PYP (M ¼ 4.34, SD ¼ 1.96;
t(127) ¼ 2.99, p < .01, d ¼ .53) conditions. No significant
difference arises among the fixed-price, high-effort PYP, and
Wang et al.
low-control PYP conditions (ts < 1, n.s.). Although we
manipulated pricing effort and pricing control, we tested
whether the control and effort manipulation checks served as
mediators of the effects of pricing conditions on purchase
intentions. The results indicated that there was a significant
mediation that was consistent with our framework (see the Web
Appendix).
Discussion
This study validates our theoretical model and confirms the
role of pricing effort and pricing control in determining the
effectiveness of participative pricing strategies, using direct
manipulations. When pricing effort increases, consumers are
less likely to purchase, even if the pricing strategy offers more
pricing control. When pricing control decreases, consumers
also show weaker purchase intentions, even when the pricing
strategy evokes the same level of pricing effort. Our studies
consistently show that PYP is an effective participative pricing
form that induces higher purchase intentions in various product
categories, both online and offline. But is it effective in all
shopping contexts?
Study 5
The successful manipulation of pricing effort associated with
PYP in Study 4 revealed an attenuating effect on purchase
intentions, but we do not observe a full reversal (i.e., negative
effect). Perhaps the high-effort threshold required to reduce
purchase intentions was not reached by ten price choice
options. In Study 5, we examine the role of effort differently
by manipulating the number of PYP decisions made across
products. We predict that having to choose prices for multiple
products will increase pricing effort sufficiently to reduce
participants’ purchase choices, relative to fixed prices (H6).
In addition, we sought to examine the revenue implications
of PYP more directly. In Study 1, participants paid a specific
price, yet we were unable to observe nonpurchases. In Studies
2–4, participants indicated their purchase intentions and max-
imum willingness to pay, but this permits only an approxima-
tion of revenue. Study 5 addresses these limitations by
recording purchase choice (yes/no) and the corresponding
payment amount in an experiment where participants make
selections in a shopping simulation. From this, we are able to
assess the revenue implications for a single product paired with
PYP (vs. fixed price) and for a shopping basket of products
paired with PYP (vs. fixed price). We anticipate a positive
effect of PYP for a single product and a negative effect for a
basket of products.
Methods
Participants and design. This study adopted a 2 (pricing strategy:
PYP vs. fixed)  2 (product evaluation: single vs. multiple)
between-subjects design. We recruited 420 U.S. adults
155
(Mage ¼ 36.09 years; 34% female) from MTurk and paid them
a nominal fee.
Procedure and measures. In the single-product-evaluation con-
dition, participants were presented with an electric toothbrush
(Quip) and given a brief product description and price. In the
fixed-price condition, participants read that the electric tooth-
brush sells for $30 and were asked to indicate their purchase
choice (“Please indicate whether you would purchase the Quip
Electric Toothbrush”; 0 ¼ “I would not purchase this product,”
and 1 ¼ “I would purchase this product for $30”). In the PYP
condition, participants were instructed that they could choose
the price to pay for the electric toothbrush from a list of $25,
$30, and $35. Participants indicated their purchase choice
(“Please indicate whether you would purchase the Quip Elec-
tric Toothbrush”; 0 ¼ “I would not purchase this product,”
1 ¼ “I would purchase this product for $25,” 2 ¼ “I would
purchase this product for $30,” and 3 ¼ “I would purchase this
product for $35”).
In the multiple-product-evaluation condition, participants
were presented an electric toothbrush (Quip), along with three
other products: dish soap (Palmolive), laundry detergent
(Tide), and a box of storage quart bags (Ziploc), with a brief
description and price (presentation order was counterbalanced).
In the fixed-price condition, participants read that the electric
toothbrush sells for $30, the dish soap sells for $5, the laundry
detergent for $11.97, and the storage bags for $7.48. In the PYP
condition, participants were told that they may pick their
purchase price (toothbrush: $25, $30, $35; dish soap: $4, $5,
$6; detergent: $ 9.97, $11.97, $13.97; and bags: $5.98, $7.48,
$8.98). Participants indicated their purchase choice for each
product (similar to the single evaluation protocol), rated pricing
effort (a ¼ .88), pricing control (a ¼ .92), and perceived
fairness (r ¼ .81) and provided demographic information.
Results
Manipulation checks. Of the 420 participants, 412 (98%) passed
the attention check. The results are not different when those
who failed the attention check are excluded from the sample, so
we report the results with all participants.
Purchase choice. We conducted a logistic regression to assess the
effect of pricing strategy (0 ¼ fixed, 1 ¼ PYP), product evalua-
tion (0 ¼ single, 1 ¼ multiple), and their interaction (pricing
strategy  evaluation) on purchase choice for the electric
toothbrush (0 ¼ no purchase, 1 ¼ purchase) as the focal depen-
dent variable that was included in all four conditions. We
observed a significant pricing strategy  evaluation interaction
(B ¼ 2.86, SE ¼ .45, Z ¼ 6.37, Wald ¼ 40.52, p < .001)
(Figure 4). As we predicted, in the single-product-evaluation
condition, PYP increased purchase choice (fixed price:
54.29%, PYP: 85.71%; B ¼ 1.62, SE ¼ .34, Z ¼ 4.75,
p < .001). In the multiple-product-evaluation condition, PYP
reduced purchase choice (fixed price: 70.48%, PYP: 40.95%;
B ¼ 1.24, SE ¼ .29, Z ¼ 4.23, p < .001).
156
Single-PYP
Condition
Single-Fixed
Multiple-PYP
Multiple-Fixed
0% 20% 40% 60% 80% 100%
Purchase Choice
Purchase No Purchase
Figure 4. Study 5: moderating effect of shopping context on purchase
choice.
Notes: Data represent the proportion of respondents indicating that they
would purchase (yes vs. no) a toothbrush paired with a PYP (vs. fixed price) in a
single-evaluation (toothbrush only) or multiple-evaluation (toothbrush and
other PYP products) context.
Next, we examined the effects of PYP on purchase choice
for the alternate products included only in the multiple-
product-evaluation condition. We generally observed a nega-
tive (or directionally negative) effect of PYP on purchase
choice: dish soap (PYP ¼ 73.33%, fixed price ¼ 89.52%,
w2 ¼ 1.69, p ¼ .19), detergent (PYP ¼ 61.90%, fixed
price ¼ 90.48%, w2 ¼ 5.63, p < .05), and storage bags
(PYP ¼ 60.95%, fixed price ¼ 88.57%, w2 ¼ 5.36, p < .05).
Revenue estimation. We used the purchase choice and price
given/selected1 to estimate the revenue generated in each con-
dition. We first examined only the toothbrush revenue, as it is
the only product that was displayed in all four conditions. In the
single-evaluation condition, we found that PYP generated a
total of $2,595 in toothbrush revenue (vs. $1,710 in the
fixed-price condition), an average of $24.71 per participant
(vs. $16.29 in the fixed-price condition; t(187.692) ¼ 8.43,
p < .001). In the multiple evaluation condition, we found that
PYP generated a total of $1,215 in toothbrush revenue (vs.
$2,220 in the fixed-price condition), an average of $11.57 per
participant (vs. $21.14 in the fixed-price condition;
t(208) ¼ 4.97, p < .001). Next, we examined only the
multiple-evaluation condition to assess the shopping basket
revenue generated across all products. We found that the PYP
condition generated $2,705 (vs. $4,523 in the fixed-price con-
dition), for an average of $25.75 per participant (vs. $43.07 in
the fixed-price condition; t(208) ¼ 7.43, p < .001).
Pricing effort. We submitted pricing effort to a 2 (pricing strat-
egy)  2 (evaluation) ANOVA. The results reveal a nonsigni-
ficant main effect of pricing strategy (MPYP ¼ 4.46, SD ¼ 1.52;
1 condition. We speculate that the increase was caused by the
Participants who opted not to purchase a given product were assigned a price
of $0.
2
We report adjusted degrees of freedom when Levene’s test indicated unequal
variance between groups.
Journal of Marketing 85(5)
Mfixed ¼ 4.24, SD ¼ 1.66; F(1, 416) ¼ 2.06, p ¼ .15, Z2 ¼ .005),
a significant main effect of evaluation (Mmultiple ¼ 4.53,
SD ¼ 1.49; Msingle ¼ 4.17, SD ¼ 1.68; F(1, 416) ¼ 5.68,
p < .05, Z2 ¼ .01), and a significant two-way interaction (F(1,
416) ¼ 3.72, p ¼ .05, Z2 ¼ .009). In the single-evaluation con-
dition, participants indicated similar level of pricing effort for
PYP and fixed price (MPYP ¼ 4.13, SD ¼ 1.63; Mfixed ¼ 4.20,
SD ¼ 1.73; t(208) ¼ .30, p ¼ .76, d ¼ .04). In the
multiple-evaluation condition, PYP (M ¼ 4.79, SD ¼ 1.32)
increased pricing effort relative to the fixed price (M ¼ 4.27,
SD ¼ 1.60; t(208) ¼ 2.57, p ¼ .01, d ¼ .36).
Pricing control. We submitted pricing control to a 2 (pricing strat-
egy)  2 (product evaluation) ANOVA. The results reveal a
significant main effect of pricing strategy (MPYP ¼ 5.15,
SD ¼ 1.22; Mfixed ¼ 4.14, SD ¼ 1.59; F(1, 416) ¼ 53.16,
p < .001, Z2 ¼ .11), a nonsignificant main effect of product
evaluation (M multiple ¼ 4.73, SD ¼ 1.37; M single ¼ 4.55,
SD ¼ 1.62; F(1, 416) ¼ 1.71, p ¼ .19, Z2 ¼ .004), and a non-
significant two-way interaction (F(1, 416) ¼ 1.19, p ¼ .28,
Z2 ¼ .003).
Notably, pricing control and effort exhibited adequate
discriminant validity (r ¼ .185); the square of their parameter
estimate (phi ¼ .03) is less than the mean of their AVE esti-
mates (AVE ¼ .78; Fornell and Larcker 1981). Consistent with
previous studies, pricing control and effort significantly
mediated the effect of pricing strategies on purchase choices
(see the Web Appendix).
Discussion
The results from Study 5 confirm our framework in several key
ways. First, we conceptually replicate mediation findings from
previous studies in the single-product condition where PYP
increased purchase choice, and this effect was mediated by
increases in pricing control but not effort. Alternatively, in the
multiple-product condition, PYP reduced purchase choice for
the focal product, and the negative effect of PYP was mediated
by both pricing control and effort, which is comparable to the
pattern of effects observed for PWYW in Study 2. Furthermore,
we found compelling evidence of PYP as a critical strategy for
single products that can backfire for multiple products. PYP
increased total toothbrush revenue by 52% in the
single-product condition, whereas it reduced revenue by 45%
in the multiple-product conditions. Notably, these revenue dif-
ferences account for purchase choice (yes/no) and, conditional
on a purchase, the price selected. The choice data suggest that
the increase in revenue in the single-product condition is
largely driven by an increase in purchases, whereas the reduc-
tion in revenue in the multiple-product condition is driven by a
decrease in purchases. Interestingly, there was an increase in
toothbrush purchases in the multiple- (vs. single-) product
consideration set (Bettman, Luce, and Payne 1998; Kahneman
and Miller, 1986; Trijp, Hoyer, and Inman 1996). The tooth-
brush may have seemed more attractive (e.g., technologically
Wang et al.
advanced) when compared with dish soap, detergent, and bags.
And perhaps this contrast explains the purchase increase, which
further manifest the complexity when consumers evaluate
products and make purchase decisions. In summary, we
demonstrate the robust evidence in favor of the control–effort
trade-off for participative pricing, which can be influenced
by the pricing strategy (PYP vs. PWYW) or the purchase con-
text where single versus multiple products are paired with a
participative pricing strategy.
General Discussion
With this research, we propose a control–effort trade-off frame-
work to understand how participative pricing shapes consu-
mers’ purchase decisions. We examine participative pricing
by focusing on two forms (PWYW and PYP) that delegate
price determinations to consumers. With PWYW, the process
of price delegation increases feelings of pricing control and
effort, and pricing effort explains its general negative effect
on purchase intentions in routine purchase contexts (retail food
in Study 1, health services in Study 2, financial services in
Study 3, entertainment in Study 4, and household products in
Study 5). Because PYP increases only feelings of pricing con-
trol, not pricing effort, it generally outperforms PWYW (and
fixed prices) across purchase domains. We theorize and present
evidence that these effects occur because consumers favor pric-
ing control but also want to avoid the costs associated with
engaging in pricing effort.
Several factors shape this control–effort trade-off for parti-
cipative pricing. In Study 3, when consumers are motivated to
save time, PWYW underperforms PYP and fixed price, and
PYP exhibits performance similar to that of fixed prices. This
outcome occurs because the focus on pricing control
diminishes; having control over the final price does not facil-
itate time savings. It also stems from the magnification of
pricing effort (PWYW) because effort undermines time-
saving attempts. Alternatively, when consumers are motivated
to save money, PWYW and PYP both outperform fixed prices.
The money-saving motive enhances the focus on pricing con-
trol (PWYW, PYP), such that consumers feel as if they can
achieve a satisfactorily low price, and it reduces feelings of
effort. In Study 5, multiple PYP product decisions increase
pricing effort, so PYP is not as effective as a fixed price. Thus,
shopping motives (saving time or money) and shopping con-
texts serve as key moderators, with practical insights.
In a parallel investigation in donation contexts (see the Web
Appendix), both PWYW and PYP perform significantly better
than a fixed-price strategy. We thus complement research that
demonstrates the efficacy of PWYW in donation contexts by
not only conceptually replicating previously findings (Gneezy
et al. 2010) but also providing evidence that PYP offers an
appealing and novel pricing strategy. Choosing how much to
donate from a list of options ($1, $3, or $5) is a popular soli-
citation method, but PYP strategies for products or services
have not been examined empirically. We find that PYP
increases purchase intentions regardless of donation context,
157
but PWYW is more effective in donation (vs. nondonation)
contexts, presumably because consumers are willing to expend
effort if their purchase benefits others.
Contributions to Pricing Theory
By adopting a consumer perspective on participative pricing,
this study advances pricing theory in several ways. First, we
uncover two key psychological mechanisms that underpin par-
ticipative pricing: control and effort. Their trade-off helps
explicate some mixed findings about the performance of parti-
cipative pricing (Chen, Koenigsberg, and Zhang 2017; Gerpott
and Schneider 2016). It represents a shift in thinking, relative to
most pricing literature, which takes a price-paid perspective
and prioritizes maximizing profit. Although such research can
provide guidance for matching offerings, price points, and con-
sumer heterogeneity to improve pricing efficiency (Christopher
and Machado 2019; Dhar and Hoch 1996), it cannot specify or
explain consumers’ psychological responses. We fill a research
gap related to consumers’ decision processes in participative
pricing settings, thereby explaining why PWYW underper-
forms in routine purchase contexts, while also specifying some
factors (purchase motives, donation context) that can enhance
its performance. The negative effects of PWYW on purchase
intentions hold regardless of the presence of reference prices;
the positive effects of PYP thus do not appear to be due to
merely a reference price effect.
Second, by comparing different forms of participative pric-
ing according to our control–effort trade-off framework, we
show that PYP, a relatively newer and untested pricing strat-
egy, can enhance purchase outcomes. By offering price
options, PYP balances the trade-off: it provides a high sense
of control but does not demand more effort, so it offers an
improved form of price participation. In Study 1, the PYP
strategy significantly outperforms all other pricing strategies,
including a discount with the same economic value, so its
performance benefit cannot be explained by mere economics.
Rather, these results emphasize the unique impacts of the con-
trol–effort trade-off. As an added benefit, PYP is unlikely to
erode product or brand quality perceptions, in contrast with
frequent discounts, which can have long-term negative conse-
quences for sellers (Anderson and Simester 2001; Mela, Gupta,
and Lehmann 1997).
Third, we contribute generally to research on consumer
decision making by identifying contexts in which consumers’
purchase decisions differ, even with the same pricing strategy.
Boundary conditions enhance and attenuate the negative
effects of pricing effort. For example, fixed prices can be more
effective than PYP for multiple product decisions; PWYW can
be as effective as PYP if consumers are motivated to save
money or their purchase involves donations to charity. How-
ever, if consumers are motivated to save time, the negative
effect of PWYW on purchase intentions is amplified. In gen-
eral, PYP is more effective when used for a single product (vs.
multiple products simultaneously).
158
Contributions to Pricing Practice
In addition to explaining why PWYW might decrease pur-
chases, we specify when PWYW will be more or less effective.
Managers can selectively implement PWYW to enhance their
pricing performance. Our finding that PWYW decreases pur-
chase intentions in specific domains also is consistent with the
choices of various companies to abandon PWYW (Houck
2019; Welss 2018). Adopting PWYW strategies requires
careful consideration, and even if marketing research were to
indicate that consumers favor higher pricing control (Study 2),
the execution might fail, due to consumers’ reluctance to
expend effort to determine their own price (Studies 1–3). Alter-
natively, firms might benefit more generally from adopting
PYP strategies.
Consumers’ willingness to exert pricing effort also varies
across shopping contexts. For example, our research suggests
PWYW is more effective when consumers are motivated to
save money, such as during the holiday season (Shively
2018). Yet PWYW likely is less effective for busy consumers
just seeking to get their holiday shopping done quickly. For
online stores that emphasize monetary savings, both PYP and
PWYW could be more effective than conventional fixed prices.
However, firms should be cautious with the use of PYP in
shopping trips that involve multiple product purchases, as we
find that the advantage of PYP is impaired when consumers
select prices for multiple products in a single shopping trip,
which increases effort. In fact, fixed price would be more
effective than PYP in multiple-product decisions; PYP is more
effective when paired with a single product. Contexts that
involve donations are another scenario for which participative
pricing, especially PWYW, promises benefits; consumers
already expect to expend effort for the benefit of others. Con-
sistent with research demonstrating PWYW’s benefits for
donations (Gneezy et al. 2010), we find that both PYP and
PWYW outperform fixed prices in charitable contexts.
Limitations and Avenues for Further Research
Building on previous research (e.g., Gneezy et al. 2012), we
uncover critical roles of pricing control and effort in determin-
ing the performance of participative pricing and identify mod-
erating roles of shopping motives and shopping contexts.
Continued research could aim to elucidate consumer character-
istics and product attributes that also explain the performance
advantages and disadvantages of different forms of participa-
tive pricing. It also might address the varying dynamics and
trade-offs associated with brand attitudes and profitability.
Although we observe positive effects on revenue and profits
in Study 1 and revenue estimates from Study 5, the
willingness-to-pay results in Studies 2–4 indicate inconsistent
patterns (see the Web Appendix). Perhaps pricing strategies
that offer high pricing control are more effective for building
favorable brand attitudes, which could be useful for new firms
seeking to acquire consumers.
Journal of Marketing 85(5)
Various factors influence the outcomes of participative pric-
ing. While this research focuses on pricing effort and its direct
effects, future research could explore other relevant factors to
expand our knowledge on participative pricing and deepen our
understanding of consumers’ purchase decisions. Generalizing
our control–effort trade-off framework, one might observe sim-
ilar effects for other marketing practices that demand consumer
participation, such as sharing pricing information online or
providing feedback in reviews. Limiting effort expenditures
in such exchange-extending activities arguably could improve
the participation outcomes. Other factors affect consumers’
willingness to expend effort, such as when they consider
expensive products (e.g., automobiles). When the value, price,
or risks of purchase are higher, buyers devote more effort to the
purchase decision (List and Lucking-Reiley 2000).
Our control–effort trade-off framework also might clarify
the implications of other pricing strategies. For example,
name-your-own-price options might trigger a sense of high
effort (because consumers try to predict which low price will
be acceptable to the seller) and also strong money-saving
motives that offset it. In addition, our research may inspire
exploration into other pricing strategies from a control–effort
trade-off perspective. In terms of pricing strategies, PYP and
PWYW are analogous to a first-price auction. In pricing prac-
tice, the minimum starting bid and a maximum “buy it now”
pricing options for products listed on eBay offer a structure for
the final price to be determined by potential buyers. These
structured options are similar to PYP, which strikes a compro-
mise or balance in the control–effort trade-off. Further inves-
tigation in other pricing areas such as those will enrich our
control–effort trade-off framework.
Associate Editor
Praveen Kopalle
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to
the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, author-
ship, and/or publication of this article.
References
Allen, Roy G. (1938), Mathematical Analysis for Economists. New
York: MacMillan.
Anderson, Eric T. and Duncan I. Simester (2001), “Price Discrimina-
tion as an Adverse Signal: Why an Offer to Spread Payments May
Hurt Demand,” Marketing Science, 20 (3), 315–27.
Arentze, Theo A., Harmen Oppewal, and Harry J. Timmermans
(2005), “A Multipurpose Shopping Trip Model to Assess Retail
Agglomeration Effects,” Journal of Marketing Research, 42(1),
109–15.
Wang et al.
Beck, Joshua T., Ryan Rahinel, and Alexander Bleier (2020),
“Company Worth Keeping: Personal Control and Preferences for
Brand Leaders,” Journal of Consumer Research, 46 (5), 871–86.
Bettman, James R., Mary Frances Luce, and John W. Payne (1998),
“Constructive Consumer Choice Processes,” Journal of Consumer
Research, 25 (3), 187–217.
Bhattarai, Abha (2016), “Priceline Just Dumped the Features That
Made It Famous,” The Washington Post (September 8), https://
www.washingtonpost.com/news/the-switch/wp/2016/09/08/price
line-just-dumped-the-feature-that-made-it-famous-bidding-on-air
line-tickets/.
Cacioppo, John T. and Richard E. Petty (1981), “Social Psychological
Procedures for Cognitive Response Assessment: The Thought-
Listing Technique,” Cognitive Assessment (11), 309–342.
Chandran, Sucharita and Vicki G. Morwitz (2005), “Effects of Parti-
cipative Pricing on Consumers’ Cognitions and Actions: A Goal
Theoretic Perspective,” Journal of Consumer Research, 32 (2),
249–59.
Charness, Gary and Tsz Cheung (2013), “A Restaurant Field
Experiment in Charitable Contributions,” Economics Letters, 119
(1), 48–9.
Chen, Yuxin, Oded Z. Koenigsberg, and John Zhang (2017), “Pay-as-
You-Wish Pricing,” Marketing Science, 36 (5), 780–91.
Chernev, Alexander, Ulf Böckenholt, and Joseph Goodman (2015),
“Choice Overload: A Conceptual Review and Meta-Analysis,”
Journal of Consumer Psychology, 25 (2), 333–58.
Childers, Terry, Christopher Carr, Joann Peck, and Stephen Carson
(2011), “Hedonic and Utilitarian Motivations for Online Retail
Shopping Behavior,” Journal of Retailing, 77 (4), 511–35.
Christopher, Ranjit M. and Fernando S. Machado (2019), “Consumer
Response to Design Variations in Pay-What-You-Want Pricing,”
Journal of the Academy of Marketing Science, 47 (5), 879–98.
Darden, William R. and Fred D. Reynolds (1971), “Shopping Orienta-
tions and Product Usage Rates,” Journal of Marketing Research, 8
(4), 505–08.
Darke, Peter R. and Darren W. Dahl (2003), “Fairness and Discounts:
The Subjective Value of a Bargain,” Journal of Consumer
Psychology, 13 (3), 328–38.
Dhar, Sanjay K. and Stephen J. Hoch (1996), “Price Discrimination
Using In-Store Merchandising,” Journal of Marketing, 60 (1),
17–30.
Duxbury, Darren, Kevin Keasey, Hao Zhang, and Shue Loong Chow
(2005), “Mental Accounting and Decision Making: Evidence
under Reverse Conditions Where Money Is Spent for Time Saved,”
Journal of Economic Psychology, 26 (4), 567–80.
Fornell, Claes and David F. Larcker (1981), “Evaluating Structural
Equation Models with Unobservable Variables and Measurement
Error,” Journal of Marketing Research, 18 (1), 39–50.
Gerpott, Torsten J. and Christina Schneider (2016), “Buying Beha-
viors When Similar Products Are Available Under Pay-What-You-
Want and Posted Price Conditions: Field-Experimental Evidence,”
Journal of Behavioral and Experimental Economics, 65, 135–45.
Gino, Francesca and Cassie Mogilner (2014), “Time, Money, and
Morality,” Psychological Science, 25 (2), 414–21.
Gneezy, Ayelet, Uri Gneezy, Leif D. Nelson, and Amber Brown
(2010), “Shared Social Responsibility: A Field Experiment in
159
Pay-What-You-Want Pricing and Charitable Giving,” Science,
329 (5989), 325–27.
Gneezy, Ayelet, Uri Gneezy, Gerhard Riener, and Leif D. Nelson
(2012), “Pay-What-You-Want, Identity, and Self-Signaling in
Markets,” Proceedings of the National Academy of Sciences, 109
(19), 7236–40.
Harlam, Bari A. and Leonard M. Lodish (1995), “Modeling Consu-
mers’ Choices of Multiple Items,” Journal of Marketing Research,
32 (4), 404–18.
Haws, Kelly L. and William O. Bearden (2006), “Dynamic Pricing
and Consumer Fairness Perceptions,” Journal of Consumer
Research, 33 (3), 304–11.
Hayes, Andrew F. (2017), Introduction to Mediation, Moderation, and
Conditional Process Analysis: A Regression-Based Approach.
New York: The Guilford Press.
Henderson, Conor M., Joshua T. Beck, and Robert W. Palmatier
(2011), “Review of the Theoretical Underpinnings of Loyalty
Programs,” Journal of Consumer Psychology, 21 (3), 256–76.
Houck, Brenna (2019), “Panera’s Utopic Pay-What-You-Want
Restaurant Dream Is Dead,” Eater (Feburary 5), https://www.
eater.com/2019/2/5/18212499/panera-cares-closing-pay-what-
you-can-restaurant.
Ismael, Amir (2017), “Everlane Has Brought Back Its ‘Choose What
You Pay’ Sale,” Business Insider (December 27), https://www.
businessinsider.com/everlane-choose-what-you-pay-sale-2017-12.
Iyengar, Sheena and Mark Lepper (2000), “When Choice Is Demoti-
vating: Can One Desire Too Much of a Good Thing?” Journal of
Personality and Social Psychology, 79 (6), 995–1006.
Jasper, Cynthia R. and Pi-Nan Rosa Lan (1992), “Apparel Catalog
Patronage: Demographic, Lifestyle and Motivational Factors,”
Psychology & Marketing, 9 (4), 275–96.
Jin, Liyin, Yanqun He and Ying Zhang (2014), “How Power States
Influence Consumers’ Perceptions of Price Unfairness,” Journal of
Consumer Research, 40 (5), 818–33.
Johnson, Eric J. and Daniel Goldstein (2003), “Do Defaults Save
Lives?” Science, 302 (5649), 1338–39.
Kahneman, Daniel and Dale T. Miller (1986), “Norm Theory: Com-
paring Reality to Its Alternatives,” Psychological Review, 93 (2),
136–53.
Kim, Ju-Young, Katharina Kaufmann, and Manuel Stegemann (2014),
“The Impact of Buyer–Seller Relationships and Reference Prices
on the Effectiveness of the Pay What You Want Pricing Mechan-
ism,” Marketing Letters, 25 (4), 409–23.
Kim, Ju-Young, Martin Natter, and Martin Spann (2009), “Pay What
You Want: A New Participative Pricing Mechanism,” Journal of
Marketing, 73 (1), 44–58.
Kivetz, Ran (2003), “The Effects of Effort and Intrinsic Motivation on
Risky Choice,” Marketing Science, 22 (4), 477–502.
Koriat, Asher, Sarah Lichtenstein, and Baruch Fischhoff (1980),
“Reasons for Confidence,” Journal of Experimental Psychology:
Human Learning and Memory, 6 (2), 107–18.
Krishna, Aradhna, Richard Briesch, Donald R. Lehmann, and Hong
Yuan (2002), “A Meta-Analysis of the Impact of Price Presentation
on Perceived Savings,” Journal of Retailing, 78 (2), 101–18.
Krishna, Vijay (2002), Auction Theory. San Diego: Academic Press.
160
Kunter, Marcus (2015), “Exploring the Pay-What-You-Want Payment
Motivation,” Journal of Business Research, 68 (11), 2347–57.
Langer, Ellen J. and Judith Rodin (1976), “The Effects of Choice and
Enhanced Personal Responsibility for the Aged: A Field Experi-
ment in an Institutional Setting,” Journal of Personality and Social
Psychology, 34 (2), 191–98.
Leclerc, France, Bernd H. Schmitt, and Laurette Dubé (1995),
“Waiting Time and Decision Making: Is Time Like Money?”
Journal of Consumer Research, 22 (1), 110–19.
List, John A. and David Lucking-Reiley (2000), “Demand Reduction
in Multiunit Auctions: Evidence from a Sportscard Field Experi-
ment,” American Economic Review, 90 (4), 961–72.
Mehta, Nitin, Surendra Rajiv, and Kannan Srinivasan (2003), “Price
Uncertainty and Consumer Search: A Structural Model of Consid-
eration Set Formation,” Marketing Science, 22 (1), 58–84.
Mela, Carl F., Sunil Gupta, and Donald R. Lehmann (1997), “The
Long-Term Impact of Promotion and Advertising on Consumer
Brand Choice,” Journal of Marketing Research, 34 (2), 248–61.
Mulhern, Francis J. and Daniel T. Padgett (1995), “The Relationship
Between Retail Price Promotions and Regular Price Purchases,”
Journal of Marketing, 59 (4), 83–90.
Schmidt, Klaus M., Martin Spann, and Robert Zeithammer (2015),
“Pay What You Want as a Marketing Strategy in Monopolistic and
Competitive Markets,” Management Science, 61 (6), 1217–36.
Schneider, Linda G. and Imran S. Currim (1991), “Consumer Pur-
chase Behaviors Associated with Active and Passive Deal-
Proneness,” International Journal of Research in Marketing, 8
(3), 205–22.
Schwartz, Barry (2004), The Paradox of Choice: Why More Is Less.
New York: Ecco.
Shively, Holly (2018), “Shoppers Find Deals on Black Friday,”
Dayton Daily News (accessed March 10, 2019), https://www.day
tondailynews.com/news/shoppers-find-deals-black-friday-but-
some-say-not-fun/eXMsY3MLD4mOlC4im7GsSO/.
Journal of Marketing 85(5)
Spann, Martin and Gerard J. Tellis (2006), “Does the Internet Promote
Better Consumer Decisions? The Case of Name-Your-Own-Price
Auctions,” Journal of Marketing, 70 (1), 65–78.
Stangl, Brigitte, Margit Kastner, and Girish Prayag (2017), “Pay-
What-You-Want for High-Value Priced Services: Differences
Between Potential, New, and Repeat Customers,” Journal of Busi-
ness Research, 74 (May), 168–74.
Strotz, Robert H. (1955), “Myopia and Inconsistency in Dynamic
Utility Maximization,” Review of Economic Studies, 23 (3),
165–80.
Thaler, Richard (1985), “Mental Accounting and Consumer Choice,”
Marketing Science, 4 (3), 199–214.
Thomaselli, Rich (2012), “Priceline Kills the Messenger Because Ads
Worked Too Well,” Advertising Age (January 30), http://adage.
com/article/news/priceline-kills-messenger-ads-worked/232409/.
Trijp, Hans, Wayne Hoyer, and J. Jeffrey Inman (1996), “Why
Switch? Product Category–Level Explanations for True Variety-
Seeking Behavior,” Journal of Marketing Research, 33 (3),
281–92.
Tyrangiel, Josh (2007), “Radiohead Says: Pay What You Want,” Time
(October 1), http://content.time.com/time/arts/article/
0,8599,1666973,00.html.
Walters, Rockney G. and Heikki J. Rinne (1986), “An Empirical-
Investigation into the Impact of Price Promotions on Retail Store
Performance,” Journal of Retailing, 62 (3), 237–66.
Warren, Nathan, Sara Hanson, and Hong Yuan (2021), “Feeling
Manipulated: How Tip Request Sequence Impacts Customers and
Service Providers” Journal of Service Research, 24 (1), 66–83.
Welss, Daniel H. (2018), “The Met’s Updated Admissions Policy,”
The Met (January 4), https://www.metmuseum.org/blogs/now-at-
the-met/2018/updated-admissions-policy-daniel-weiss.
Xia, Lan, Monika Kukar-Kinney, and Kent B. Monroe (2010),
“Effects of Consumers’ Efforts on Price and Promotion Fairness
Perceptions,” Journal of Retailing, 86 (1), 1–10.