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The role of external reference price in pay-what-you-want pricing: An empirical investigation across product types

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  • Weisstein, Fei L.
  • Choi, Pilsik
  • Andersen, Peter

Abstract

This research aims to investigate the effectiveness of the adoption of external reference price (ERP) in influencing consumers' pay-what-you-want (PWYW) final payments across different product types. Results from two experiments show the effectiveness of using ERP as an anchor heavily depends on the nature of the product category. For hedonic products, the absence of an ERP, compared to the presence of one, leads to higher perceived quality and PWYW payments. The results are the opposite for utilitarian products. This study contributes to PWYW literature by investigating how product types affect consumers’ perceived quality of the product offered and their PWYW payments.

Suggested Citation

  • Weisstein, Fei L. & Choi, Pilsik & Andersen, Peter, 2019. "The role of external reference price in pay-what-you-want pricing: An empirical investigation across product types," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 170-178.
    • Handle: RePEc:eee:joreco:v:50:y:2019:i:c:p:170-178
    DOI: 10.1016/j.jretconser.2019.05.017
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    6. Narwal, Preeti & Nayak, J.K., 2020. "How consumers form product quality perceptions in absence of fixed posted prices: Interaction of product cues with seller reputation and third-party reviews," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).
    7. Hsin-Hsien Liu & Hsuan-Yi Chou, 2022. "Attribute specification effect on hedonic and utilitarian options," Australian Journal of Management, Australian School of Business, vol. 47(2), pages 322-341, May.
    8. Emili Vizuete-Luciano & Oktay Güzel & José M. Merigó, 2023. "Bibliometric research of the Pay-What-You-Want Topic," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(5), pages 413-426, October.
    9. Fan, Liu & Wang, Yawei & Mou, Jian, 2024. "Enjoy to read and enjoy to shop: An investigation on the impact of product information presentation on purchase intention in digital content marketing," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    10. Hsin‐Hui Lin & Pin‐Han Chen & Chih‐Lun Wu, 2023. "Exploring the price anchoring effect in mobile commerce: An experimental study," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1601-1623, April.
    11. Di Domenico, Giandomenico & Premazzi, Katia & Cugini, Antonella, 2022. "“I will pay you more, as long as you are transparent!”: An investigation of the pick-your-price participative pricing mechanism," Journal of Business Research, Elsevier, vol. 147(C), pages 403-419.

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