2018-03-14listen 67

Pay What You Want May Deter Consumers

Music, film and video game makers face a new online, digital world.

And some are testing a revolutionary pricing system: "pay what you want."

But a new study finds that when consumers can name their own price, many opt out of buying at all.

The study is in the Proceedings of the National Academy of Sciences.

For the research, tour boat passengers posed for photos.

Each boat ride announced a price of $15 per picture.

But they then charged either $15, $5 or the option to pay what you want.

As expected, the fewest tourists purchased photos when they had to pay full price.

But more customers bought photos when they cost $5 than when prices were pay what you want—which could have saved passengers even more.

The researchers suggest that choosing to pay less than an announced lower than expected price made people feel cheap.

With choices then limited to spending more money or feeling like a tightwad, potential customers simply opted out of the purchase.

So on sea or land, a low, set price may catch the most fish.