Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective
This paper investigates social influences on Pay‐What‐You‐Want (PWYW) pricing decisions by combining a socio‐psychological phenomenon, called “spotlight effect” (defined as an egocentric bias while estimating the salience of one's own behavior and external appearance), with the well‐established...
| Main Authors: | , , , |
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| Format: | Journal Article |
| Published: |
Wiley-Blackwell
2021
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| Online Access: | http://hdl.handle.net/20.500.11937/82657 |
| _version_ | 1848764531450314752 |
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| author | Roy, Rajat Sharma, Piyush Chan, Ricky YK Potdar, Vidyasagar |
| author_facet | Roy, Rajat Sharma, Piyush Chan, Ricky YK Potdar, Vidyasagar |
| author_sort | Roy, Rajat |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This paper investigates social influences on Pay‐What‐You‐Want (PWYW) pricing decisions by combining a socio‐psychological phenomenon, called “spotlight effect” (defined as an egocentric bias while estimating the salience of one's own behavior and external appearance), with the well‐established “anchoring and adjustment” perspective. We test our hypotheses with one field study and two lab experiments. Findings show that when making a payment in PWYW setting, customers perceive greater attention on self (vs. others) and in the presence of distant (vs. close) others, which makes them initially anchor the price they are willing to pay on their internal reference price. However, this anchoring effect is adjusted downwards (i.e., reduced) in the presence of external reference prices. Our findings would help managers understand the factors influencing customers' PWYW pricing decisions, based on their internal and external reference prices. Managers can further use this knowledge to develop more effective strategies to drive higher PWYW prices. |
| first_indexed | 2025-11-14T11:20:50Z |
| format | Journal Article |
| id | curtin-20.500.11937-82657 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:20:50Z |
| publishDate | 2021 |
| publisher | Wiley-Blackwell |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-826572023-04-14T03:13:13Z Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective Roy, Rajat Sharma, Piyush Chan, Ricky YK Potdar, Vidyasagar This paper investigates social influences on Pay‐What‐You‐Want (PWYW) pricing decisions by combining a socio‐psychological phenomenon, called “spotlight effect” (defined as an egocentric bias while estimating the salience of one's own behavior and external appearance), with the well‐established “anchoring and adjustment” perspective. We test our hypotheses with one field study and two lab experiments. Findings show that when making a payment in PWYW setting, customers perceive greater attention on self (vs. others) and in the presence of distant (vs. close) others, which makes them initially anchor the price they are willing to pay on their internal reference price. However, this anchoring effect is adjusted downwards (i.e., reduced) in the presence of external reference prices. Our findings would help managers understand the factors influencing customers' PWYW pricing decisions, based on their internal and external reference prices. Managers can further use this knowledge to develop more effective strategies to drive higher PWYW prices. 2021 Journal Article http://hdl.handle.net/20.500.11937/82657 10.1002/mar.21474 Wiley-Blackwell fulltext |
| spellingShingle | Roy, Rajat Sharma, Piyush Chan, Ricky YK Potdar, Vidyasagar Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective |
| title | Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective |
| title_full | Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective |
| title_fullStr | Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective |
| title_full_unstemmed | Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective |
| title_short | Exploring the Role of Spotlight Effect in Pay-What-You-Want (PWYW) Pricing – An Anchoring and Adjustment Perspective |
| title_sort | exploring the role of spotlight effect in pay-what-you-want (pwyw) pricing – an anchoring and adjustment perspective |
| url | http://hdl.handle.net/20.500.11937/82657 |