IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v36y2017i2p187-194.html
   My bibliography  Save this article

Signaling Virtue: Charitable Behavior Under Consumer Elective Pricing

Author

Listed:
  • Minah H. Jung

    (Stern School of Business, New York University, New York, New York 10012)

  • Leif D. Nelson

    (Haas School of Business, University of California, Berkeley, Berkeley, California 94720)

  • Uri Gneezy

    (School of Business, Sichuan University, 610064 Sichuan, China)

  • Ayelet Gneezy

    (Rady School of Management, University of California, San Diego, La Jolla, California 92093)

Abstract

Two field experiments examined generosity under consumer elective pricing. In shared social responsibility (SSR), consumers choose how much to pay, knowing that a percentage of their payment goes to support a charitable cause. Replicating past research, consumers in our experiments were sensitive to the presence of charitable giving, paying more when a portion of their payment went to charity. Notably, however, they were largely insensitive to the percentage of payment allocated to charity—customers paid little more when 99% of the payment went to charity than when only 1% went to charity. Neither self-selection nor social pressure fully explained higher payments under SSR.

Suggested Citation

  • Minah H. Jung & Leif D. Nelson & Uri Gneezy & Ayelet Gneezy, 2017. "Signaling Virtue: Charitable Behavior Under Consumer Elective Pricing," Marketing Science, INFORMS, vol. 36(2), pages 187-194, March.
    • Handle: RePEc:inm:ormksc:v:36:y:2017:i:2:p:187-194
    DOI: 10.1287/mksc.2016.1018
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/mksc.2016.1018
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mksc.2016.1018?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Regner, Tobias & Riener, Gerhard, 2012. "Voluntary payments, privacy and social pressure on the internet: A natural field experiment," DICE Discussion Papers 82, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Regner, Tobias & Barria, Javier A., 2009. "Do consumers pay voluntarily? The case of online music," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 395-406, August.
    3. Ernst Fehr & Martin Brown & Christian Zehnder, 2009. "On Reputation: A Microfoundation of Contract Enforcement and Price Rigidity," Economic Journal, Royal Economic Society, vol. 119(536), pages 333-353, March.
    4. Friestad, Marian & Wright, Peter, 1994. "The Persuasion Knowledge Model: How People Cope with Persuasion Attempts," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 21(1), pages 1-31, June.
    5. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
    6. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, September.
    7. Klaus M. Schmidt & Martin Spann & Robert Zeithammer, 2015. "Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets," Management Science, INFORMS, vol. 61(6), pages 1217-1236, June.
    8. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    9. Small, Deborah A. & Loewenstein, George & Slovic, Paul, 2007. "Sympathy and callousness: The impact of deliberative thought on donations to identifiable and statistical victims," Organizational Behavior and Human Decision Processes, Elsevier, vol. 102(2), pages 143-153, March.
    10. Imas, Alex, 2014. "Working for the “warm glow”: On the benefits and limits of prosocial incentives," Journal of Public Economics, Elsevier, vol. 114(C), pages 14-18.
    11. Neeraj Arora & Ty Henderson, 2007. "Embedded Premium Promotion: Why It Works and How to Make It More Effective," Marketing Science, INFORMS, vol. 26(4), pages 514-531, 07-08.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donnelly, Grant E. & Simester, Duncan I. & Norton, Michael I., 2021. "The short and long-run impact of empowering customers in corporate social responsibility initiatives," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 616-637.
    2. Saccardo, Silvia & Li, Charis X. & Samek, Anya & Gneezy, Ayelet, 2021. "Nudging generosity in consumer elective pricing," Organizational Behavior and Human Decision Processes, Elsevier, vol. 163(C), pages 91-104.
    3. Katharina Dowling & Daniel Guhl & Daniel Klapper & Martin Spann & Lucas Stich & Narine Yegoryan, 2020. "Behavioral biases in marketing," Journal of the Academy of Marketing Science, Springer, vol. 48(3), pages 449-477, May.
    4. Shijie Lu & Dai Yao & Xingyu Chen & Rajdeep Grewal, 2021. "Do Larger Audiences Generate Greater Revenues Under Pay What You Want? Evidence from a Live Streaming Platform," Marketing Science, INFORMS, vol. 40(5), pages 964-984, September.
    5. Schwartz, Daniel & Keenan, Elizabeth A. & Imas, Alex & Gneezy, Ayelet, 2021. "Opting-in to prosocial incentives," Organizational Behavior and Human Decision Processes, Elsevier, vol. 163(C), pages 132-141.
    6. Wang, Cindy Xin & Yuan, Hong & Beck, Joshua T., 2022. "Too tired for a good deal: How customer fatigue shapes the performance of Pay-What-You-Want pricing," Journal of Business Research, Elsevier, vol. 144(C), pages 987-996.
    7. Preeti Narwal & J. K. Nayak & Shivam Rai, 2022. "Assessing Customers' Moral Disengagement from Reciprocity Concerns in Participative Pricing," Journal of Business Ethics, Springer, vol. 178(2), pages 537-554, June.
    8. Britta Butz & Christine Harbring, 2022. "Tipping for charity: a field experiment in charitable giving on free walking tours," Journal of Business Economics, Springer, vol. 92(5), pages 781-808, July.
    9. Casarico, Alessandra & Tonin, Mirco, 2021. "A field experiment on fundraising to support independent information," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 227-250.
    10. Roy, Rajat & Das, Gopal, 2022. "The role of contextual factors in increasing Pay-What-You-Want payments: Evidence from field experiments," Journal of Business Research, Elsevier, vol. 139(C), pages 1540-1552.
    11. Muhammad Irfan & Muhammad Shaukat Malik & Syeda Khadija Zubair, 2022. "Impact of Vlog Marketing on Consumer Travel Intent and Consumer Purchase Intent With the Moderating Role of Destination Image and Ease of Travel," SAGE Open, , vol. 12(2), pages 21582440221, May.
    12. Kotsadam, Andreas & Somville, Vincent, 2024. "Wealth and charitable giving – Evidence from an Ethiopian lottery," Journal of Development Economics, Elsevier, vol. 167(C).
    13. Casarico, Alessandra & Tonin, Mirco, 2018. "Pay-What-You-Want to Support Independent Information: A Field Experiment on Motivation," IZA Discussion Papers 11366, Institute of Labor Economics (IZA).
    14. Jordi Tena‐Sánchez & Francisco J. León‐Medina & José A. Noguera, 2020. "Empathic cultural consumers: Pay what you want in the theater," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(4), pages 1213-1245, December.
    15. Ma, Xuejing & Wang, Zetao & Liu, Hongju, 2022. "Do long-life customers pay more in pay-what-you-want pricing? Evidence from live streaming," Journal of Business Research, Elsevier, vol. 142(C), pages 998-1009.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Armstrong Soule, Catherine A. & Madrigal, Robert, 2015. "Anchors and norms in anonymous pay-what-you-want pricing contexts," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 167-175.
    2. Saccardo, Silvia & Li, Charis X. & Samek, Anya & Gneezy, Ayelet, 2021. "Nudging generosity in consumer elective pricing," Organizational Behavior and Human Decision Processes, Elsevier, vol. 163(C), pages 91-104.
    3. Egbert, Henrik & Greiff, Matthias & Xhangolli, Kreshnik, 2014. "PWYW Pricing ex post Consumption: A Sales Strategy for Experience Goods," MPRA Paper 53376, University Library of Munich, Germany.
    4. Greiff, Matthias & Egbert, Henrik, 2016. "A Survey of the Empirical Evidence on PWYW Pricing," MPRA Paper 68693, University Library of Munich, Germany.
    5. Samahita Margaret, 2020. "Pay-What-You-Want in Competition," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(1), pages 1-16, January.
    6. Kukla-Gryz Anna & Zagórska Katarzyna, 2017. "The effects of individual internal versus external reference prices on consumer decisions for pay-what-you-want payments," Central European Economic Journal, Sciendo, vol. 4(51), pages 1-17, December.
    7. Charness, Gary & Cobo-Reyes, Ramón & Sánchez, Ángela, 2016. "The effect of charitable giving on workers’ performance: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 61-74.
    8. Jasjit Singh & Nina Teng & Serguei Netessine, 2019. "Philanthropic Campaigns and Customer Behavior: Field Experiments on an Online Taxi Booking Platform," Management Science, INFORMS, vol. 65(2), pages 913-932, February.
    9. Chun-Tuan Chang & Xing-Yu (Marcos) Chu, 2020. "The give and take of cause-related marketing: purchasing cause-related products licenses consumer indulgence," Journal of the Academy of Marketing Science, Springer, vol. 48(2), pages 203-221, March.
    10. Krämer, Florentin & Schmidt, Klaus M. & Spann, Martin & Stich, Lucas, 2017. "Delegating pricing power to customers: Pay What You Want or Name Your Own Price?," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 125-140.
    11. Alessandra Casarico & Mirco Tonin, 2018. "Pay-What-You-Want to Support Independent Information - A Field Experiment on Motivation," CESifo Working Paper Series 6939, CESifo.
    12. Greiff, Matthias & Egbert, Henrik, 2016. "The Pay-What-You-Want Game and Laboratory Experiments," MPRA Paper 75222, University Library of Munich, Germany.
    13. Gerpott Torsten J., 2016. "A review of the empirical literature on Pay-What-You-Want price setting," Management & Marketing, Sciendo, vol. 11(4), pages 566-596, December.
    14. Ma, Xuejing & Wang, Zetao & Liu, Hongju, 2022. "Do long-life customers pay more in pay-what-you-want pricing? Evidence from live streaming," Journal of Business Research, Elsevier, vol. 142(C), pages 998-1009.
    15. Gravert, Christina, 2017. "Pride and patronage - pay-what-you-want pricing at a charitable bookstore," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 67(C), pages 1-7.
    16. Hofmann, Elisa & Fiagbenu, Michael E. & Özgümüs, Asri & Tahamtan, Amir M. & Regner, Tobias, 2021. "Who is watching me? Disentangling audience and interpersonal closeness effects in a Pay-What-You-Want context," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    17. Carpenter, Jeffrey, 2021. "The shape of warm glow: Field experimental evidence from a fundraiser," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 555-574.
    18. Regner, Tobias, 2015. "Why consumers pay voluntarily: Evidence from online music," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 205-214.
    19. Jingping Li & Yohanes E. Riyanto, 2017. "Category Reporting In Charitable Giving: An Experimental Analysis," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 397-408, January.
    20. Akbaş, Merve & Ariely, Dan & Yuksel, Sevgi, 2019. "When is inequality fair? An experiment on the effect of procedural justice and agency," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 114-127.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:36:y:2017:i:2:p:187-194. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.