Comparing Average Payments and Minimal Bounds for Lower and Higher Outcomes Among Customers in Participative Pricing Mechanisms: An Empirical Investigation of PWYW, NYOP, and PYP
(A2025-125952)

AUTHORS

Bastian Werner, Brandenburg University of Technology Cottbus-Senftenberg; Florian Dost, Brandenburg University of Technology

ABSTRACT

This research uses three online experiments (total n =501) to examine which participative pricing mechanism—Pay What You Want (PWYW), Name Your Own Price (NYOP), or Pick Your Price (PYP)—firms should use to optimize purchase intentions and expected payments. In doing so, we combine the PWYW and NYOP literatures and jointly test relevant mediators: perceived price fairness, price control, and effort. In addition to average total and indirect effects, a novel application of the Kolmogorov-Smirnov test provided lower bounds of consumers paying less or more under each pricing method. Our results show that PWYW leads to the highest purchase intention despite generating the lowest payments. PYP outperforms in terms of expected payments. Mediation analyses indicate that perceived control negatively affects purchase intention for PYP and NYOP. Under PYP and NYOP, at least 10% to 84% of consumers pay more, depending on the study, but very few (single digit percentages) pay less than under PWYW.