A Peep Into Partıcıpatıve Prıcıng: Determınants Of PWYW Prıcıng Decısıon

Abstract

Pay what you want pricing (PYWY pricing) is a novel pricing method that gives customers the power when it comes to deciding the monetary value to be paid for the product or service that is being offered by the seller. This participation and involvement of customers is what led to the umbrella terms being termed as participative pricing [1]. It is usually believed that people would pay nothing as nobody would want to spend money on something that can be obtained for free. Surprisingly, research has shown that given the ability to fix and pay one’s price of choice, everyone ends up paying something, more so above the suggested price. The fact that customers do end up paying a non-zero amount is what has led to the acceptance of this model in various business decisions. This also shows the various reasons for which people make purchase decisions. This paper aims to study some of the factors that affect the price paid by customers when it comes to PWYW pricing.