Wednesday, November 30, 2016
Stuff To Ponder: Expanded Approaches To Pay What You Want Pricing
Butts In the Seats: A few weeks ago economist Alex Tabarrok wrote about a strange “pay what you want” promotion a shoe company was running. It struck him and many commenters of the Marginal Revolution blog as a psychological experiment with a goal of getting most people to select the set middle range price.
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2 comments:
I haven't even really thought about using pay what you want on a large scale, but I kind of love the idea. I know the theater company in my home town always does one night of pay what you can ticketing and it ends up being a great night because that is when a lot of students come. A lot of young people I know, even ones in the theater have a great desire to go see shows but feel like it is always too expensive for them to make it work. I have felt that way so many times, that I want to go see something, but I don't have 40 dollars to spend on art. I recognize that it is a choice we all make, and it depends on how important the show is to us, pay what you want I think is a fantastic device for getting students to go to the theater. If you told me I could be 15 dollars instead of 40 I may have gone, I may have even given you 20 because I felt good about the place I was going to. I don't know how practical pay what you will pricing is a way to make all of your money but I think using it the way my home town theater company does is perfect. It allows people who can't afford to see the show at it's normal rate, an opportunity to come, and it gets more young people involved in the theater.
Interesting concept but I don’t see how it would be that effective. Intuitively it makes a lot a sense because everyone values products differently. But from my perspective, for this to actually work, more than one provider would have to take on the same concept. I also ask myself who is winning in this scenario. To be honest, at the end of the day, I feel people would be more satisfied paying the average or set price. It seems like a significant amount of legwork to achieve market control, which we all know is inertly impossible. Now that begin said I do believe that this could work in some markets or for some industries but if an entire market was to convert to this mentality I believe that it would do more harm than good. I would be interested to see more of the data that was received from doing this and compare it to other more traditional methods.
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