The dissertation explores factors influencing consumers' payments in anonymous Pay-What-You-Want (PWYW) pricing contexts. Consumers often pay more than zero when given the opportunity to self-determine payments. However, most PWYW research has focused on contexts where the possibility of social influence from a salesperson or clerk is present. I suggest that in anonymous exchange contexts where social pressure does not exist, consumers will nevertheless make voluntary payments greater than zero. The present research explores PWYW in anonymous purchase contexts. Results from eight studies indicate that PWYW payment amounts are affected by heuristics and biases. In Essay 1, the influence of reference price on PWYW payments is explored. Firm-provided external reference prices (ERPs) framed as injunctive norms (e.g., suggested price) and descriptive norms (e.g., average payment) caused anchoring effects on voluntary payments such that those with higher ERPs reported higher payments. Further, ERPs framed as descriptive (vs. injunctive) norms were more predictive of payment amounts, but only when the ERP is high. Recalling internal reference price information is more effortful than simply reacting to a firm-provided price. The possibility that decreased cognitive processing results in higher payments, violating the concept of self-interest primacy, is explored in Essay 2. Four studies manipulate processing styles and demonstrate that when consumers use more effortful cognitive processing, they tend to make lower PWYW payments. These results suggest that consumers are likely to rely on a normal price heuristic when using more superficial processing. The dissertation demonstrates the importance of reference price information and cognitive processing styles when voluntary anonymous payments are made anonymously. PWYW decisions are influenced by the exchange context and how the information is cognitively processed. At a theoretical level, the findings demonstrate that consumers make voluntary payments in the absence of social pressure and that those payments can be predictably influenced by features in the exchange setting. Finally, the research suggests that consumers who exert less cognitive effort in PWYW situations make higher payments. It therefore appears that the first instinct is not to act self-interestedly by making little or no payments, but rather payments seem to be guided by heuristic-based decision making. / 2016-09-29

abstract: In two independent and thematically connected chapters, I investigate consumers' willingness to pay a price premium in response to product development that entails prosocial attributes (PATs), those that allude to the reduction of negative externalities to benefit society, and to an innovative participatory pricing design called 'Pay-What-You-Want' (PWYW) pricing, a mechanism that relinquishes the determination of payments in exchange for private goods to the consumers themselves partly relying on their prosocial preferences to drive positive payments. First, I propose a novel statistical approach built on the choice based contingent valuation technique to estimate incremental willingness to pay (IWTP) for PATs that accounts for consumer heterogeneity, dependence in the decision making processes, and incentive compatibility. I validate the approach by estimating IWTP for a variety of PATs and contrast the theoretical and managerial benefits of using the proposed approach over extant techniques used in the literature for this purpose. Second, I propose a general and flexible statistical modeling framework for estimating PWYW payments that exceed zero. It relies on the joint estimation of three types of consumer decision processes namely, the consumer propensity to default to an explicit price recommendation, the propensity to pay a least legitimate price, and the payment of a freely-chosen non-zero payment. Of particular interest is the model's ability to account for a wide variety of design constraints such as the setting of price bounds, explicit price recommendations, and the provision of a menu of discrete prices to choose from. I validate the approach by estimating PWYW payments for a variety of products such as music licenses, snacks, and sports tickets. I specifically examine and report the differential impact of three managerially controllable variables namely, 'payment anonymity', 'information on payment recipients' and 'information of product value/quality'. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2016

This dissertation reports a series of studies on social influences in decision making with wide ranging marketing implications in areas such as gamification initiatives, participative pricing mechanisms, and charity fundraising strategies. The body of this work comprises of three indepth, stand-alone studies. The first study, "Contagion of the Competitive Spirit: The Influence of a Competition on Non-Competitors", investigates the influence of a competition on noncompetitors who do not participate in it but are aware of it. In a series of experimental studies, the study shows that the mere awareness of a competition can affect a non-competitor's performance in similar tasks. These experiments provide confirmatory and process evidence for this contagion effect, showing that it is driven by heightened social comparison motivation due to mere awareness of the competition. In addition, the study finds evidence that the reward level for the competitors could moderate the contagion effect on the non-competitors. The second study, "The Negative Effects of Precommitment on Reciprocal Behaviour: Evidence from a Series of Voluntary Payment Experiments", examines the effects of precommitment on reciprocal behaviour towards a forthcoming benefit. Through a series of experiments in several countries, the study shows that precommitment often weakens reciprocal behaviour. In two field experiments, a laboratory and an online experiment, the study finds consistent evidence that voluntary payment amounts decrease for individuals who are asked to precommit their payment. The results from a final online trust-game experiment support the posited mental-accounting mechanism for the effect. The third study, "Hold-Up Induced by Demand for Fairness: Theory and Experimental Evidence", explores the domain of hold-up and fairness concerns. While recent research suggests that fairness concerns could mitigate hold-up problems, this study proposes a starkly opposite possibility: that fairness concerns can also induce hold-up problems and thus significant inefficiencies. The study reports theoretical analysis and experimental evidence of hold-up in scenarios in which it will not occur if agents are purely self-interested, but could occur if they care about fairness at ex post negotiation.