Context
Pay-what-you-want has developed in several sectors such as the music industry, restaurants or museums. As its name suggests, this practice consists in letting buyers fix the price of their purchase. Even though pay-what-you-want may come out as an opportunity for consumers to pay nothing and freeride, it seems to be quite successful in the contexts of last-minute or time-limited sales, when the earnings are given to charity or when a price is suggested. However, since buyers solely decide on their contributions, pay-what-you-want can be risky and result in business failure when incomes fail to cover expenses. Therefore, companies wishing to engage in pay-what-you-want strategies could benefit from understanding why consumers choose to pay more or pay less in these situations.
Research questions
Previous research has proven that consumers rarely freeload in a pay-what-you-want context and that pay-what-you-want can even be as profitable as fixed pricing. Why don’t consumers choose to pay zero when they are given that opportunity? It may be because of their levels of fairness and altruism, social norms, income, reputational concerns etc. Unfortunately, it is quite hard to evaluate which consumers are fair, which are altruists or which abide by social norms. This is why in an article published in the Journal of Marketing Research in 2021, Santana and Morwitz choose gender as a proxy to understand consumer behavior. They investigate how gender determines different motivation and value sets, which ultimately impact behavior, and answer the following research questions:
– Does buyer gender influence payment amount?
– Do different motivation and value sets explain the potential differences between men’s and women’s behaviors?
– Is there a way to increase overall willingness to pay?
Method
To answer these questions, the authors conducted three studies:
– study 1 was a preliminary analysis of a retailer’s data to check the correlation between gender and payment amount in a pay-what-you-want context,
– in study 2, 578 participants were presented with a fictional scenario, in which they had to indicate their willingness to pay for 2 cookies in a pay-what-you-want context. Additional measures were made to understand payment motives.
– study 3 and 4 manipulated payment motives (through role-playing or marketing advertisements) and tested the impact of this manipulation on willingness to pay in a pay-what-you-want context.
Results
– Men tend to pay less than women in a pay-what-you-want context. This stems from the fact that men and women do not share the same payment motives. Women’s behavior is driven by “communal” values such as harmony, trust, cooperation and connection, while men’s behavior is driven by “agentic” values such as power, self-sufficiency, competence or status. In other words, in a pay-what-you-want context, women feel connected to the seller, they are concerned for their welfare as well as for the seller’s welfare, which entices them to pay more. Whereas men see themselves as separate from the seller, and are motivated by the economic bargain, which entices them to pay less.
– Since men have a “agentic” orientation, they are less likely to come up with “communal” payment motives of their own and may need a push in the right direction to increase they payments. Indeed, when the social or communal stakes of the payment are emphasized, men pay more, and the difference between women’s and men’s payments decreases.
Why is this article relevant for researchers?
This research contributes to both the literature of gender differences and of pay-what-you-want practices. It highlights the role of agentic VS communal orientation in a pay-want-you-want context. It also helps understand why women tend to give more to charities. Moreover, the article provides levers to increase men’s payments in these situations. It shows how making communal motives salient increases their willingness to pay.
Because of the increasing tension surrounding the question of sex and gender, future research could favor the investigations in agentic/communal orientations rather than sex or gender or simply include gender-fluid people in their analysis. Future articles could also look for other ways to increase generosity from people with an agentic orientation, such as peer-pressure, reputational considerations, generativity, being considered as a role-model etc.
Why is this article relevant for professionals?
This article is interesting for professionals because it helps understand why women’s and men’s behaviors are different. It is particularly relevant because many marketers still use gender as a segmentation criterion. This research shows that men tend to pay less than women in pay-what-you-want contexts, because men see themselves as separated from the seller and are motivated by the economic bargain (agentic orientation) while women feel connected with the seller and are motivated by increasing their own welfare as well as the seller’s (communal orientation). The authors show that by highlighting communal payment motives, men can be encouraged to give more. Therefore, the article explains that the messages conveyed by campaigns in pay-what-you-want contexts should emphasize the social aspects of the payment and provide buyers with communal payment motives. For instance, Wikipedia entices people to donate by stressing “the community” at work and the “great loss to the world” if it became a commercial organization. These results may also inspire professionals who wish to encourage giving to charities or tipping. As an example, this tipping jar reminds customers of the vital importance of tips for waiters.
Finally, knowing that individuals with an agentic orientation tend to give less than those with a communal orientation can lead professionals to turn the agentic consumer’s personality to their advantage. Granted agentic consumers may be concerned by the economic gain that derives from pay-what-you-want contexts, it does not mean that they are not susceptible to other motives. For instance, peer pressure may boost people with an agentic orientation to tip or donate because of status or power concerns.