Pay-What-You-Want Pricing in the Digital Product Marketplace: A Feasible Alternative to Piracy Prevention?

2022 ◽  
Author(s):  
Byung Cho Kim ◽  
So Eun Park ◽  
Detmar W. Straub
Keyword(s):  
Theoretical Model ◽  
Product Quality ◽  
Network Externalities ◽  
Pricing Strategy ◽  
Standard Theory ◽  
Product Domain ◽  
Digital Product ◽  
Pay What You Want ◽  
Feasible Alternative

In pay-what-you-want (PWYW) pricing, buyers are allowed to pay any amount they want, often including a price of zero. Standard theory predicts that buyers are driven solely by their own interest and will always choose to pay nothing, making PWYW pricing impractical to use. Nonetheless, PWYW pricing has been consistently occurring in the marketplace. We build and analyze a theoretical model to explain the presence of PWYW pricing in the marketplace and identify the situations under which businesses are better off adopting it over the traditional posted pricing. Because the digital product domain is a particularly good fit for PWYW pricing because of its constant exposure to piracy threats, we focus on digital product firms and examine PWYW pricing as an alternative to their piracy prevention efforts. We show that PWYW pricing becomes a superior pricing strategy when the pirate version is quite similar to the authentic product and it is costly for the firm to improve its product quality. Moreover, if network externalities are present, PWYW pricing can outperform posted pricing only when the network externalities are weak. The results explain why PWYW pricing is rare in the established digital product marketplace, which exhibits strong network externalities.

Determinants of consumers' response to pay-what-you-want pricing strategy on the Internet

2016 ◽  
Vol 69 (10) ◽  
pp. 4313-4320 ◽  
Author(s):  
Fei L. Weisstein ◽  
Monika Kukar-Kinney ◽  
Kent B. Monroe
Keyword(s):  
Pricing Strategy ◽  
The Internet ◽  
Pay What You Want

Mixed pricing strategies in museums: Examining the potential of voluntary contributions for capturing consumer surplus

2019 ◽  
Vol 26 (1) ◽  
pp. 115-136
Author(s):  
Bart Neuts
Keyword(s):  
Consumer Surplus ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Market Demand ◽  
Voluntary Contributions ◽  
Museum Visitors ◽  
Pay What You Want ◽  
Visitor Survey ◽  
Maritime Museum ◽  
Design Experiments

Existing pricing strategies at museums rarely reflect actual market demand. This article compares willingness to pay with paid entrance fees to establish consumer surplus and investigates whether voluntary contributions can serve to capture part of this surplus. A donation box is tested under various design experiments to identify best-performing contribution mechanisms. The proposed method is tested at the New Zealand Maritime Museum, with data collected via an intercept visitor survey and through electronic donation box counters. While the results indicate the existence of a significant consumer surplus, practically none of this surplus was gathered via voluntary contributions, and under normal circumstances less than 1% of museum visitors offered a donation. An animated donation box increased donations to 2% but remained well below the percentage of visitors that claimed to have a positive consumer surplus. The findings conclude that pay-what-you-want principles seem to have limited potential in mixed pricing strategy environments.

Persuasion in Islamic finance

2020 ◽  
pp. 031289622092655
Author(s):  
Saad Azmat ◽  
Haiqa Ali ◽  
Kym Brown ◽  
Michael Skully
Keyword(s):  
Theoretical Model ◽  
Product Quality ◽  
Prior Knowledge ◽  
Jel Classification ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Persuasive Strategies ◽  
Equilibrium Level ◽  
Thinking Process ◽  
The Impact

This article explores the mechanisms of persuasion in Islamic finance that may have helped support the growth of this market. Our theoretical model may explain those factors which may influence a customer to select an Islamic financial product. For complex decisions where a person may not fully understand the background concepts such as with finance or Arabic terminology, product quality may be judged based on information in advertising and prior knowledge. Our model shows that Islamic bankers can use the customer’s “coarse thinking” process when advertising products. They may be a means to make products appear more religiously (Shariah) compliant. The equilibrium level of persuasive strategies proposed help reinforces the impact of persuasion for Islamic banks. JEL Classification: JEL: G21, G11, M31

The Pay What You Want pricing strategy applied to digital products: an essay

2021 ◽  
Author(s):  
Ana Isabel Torres ◽  
César Lapa Barros ◽  
Amélia Ferreira da Silva ◽  
Ricardo Jorge Silva
Keyword(s):  
Pricing Strategy ◽  
Digital Products ◽  
Pay What You Want

Software as a Service and the Pricing Strategy for Vendors

2010 ◽  
pp. 154-192 ◽  
Author(s):  
Nizar Abdat ◽  
Marco Spruit ◽  
Menne Bos
Keyword(s):  
Information Technology ◽  
Data Centers ◽  
New Technologies ◽  
State Of The Art ◽  
The State ◽  
Software As A Service ◽  
Pricing Strategy ◽  
Digital Product

Software as a Service (SaaS) has been a dominant information technology (IT) news topic over the last few years. It is a new phenomenon where software as a digital product, instead of being locally installed and delivered as a product, has been shifted to being installed in data centers and delivered as a service. The users do not need to worry about the installation and maintenance of their software since these tasks have now become the responsibility of the vendor. In reality, many people are still puzzled about SaaS with other new technologies. Next to that, there are numerous enterprise users who hesitate to adopt SaaS solutions because of the idea of storing data outside their company. This chapter elaborates on the state-of-the-art of SaaS from both scientific and business perspectives to help readers better understand this technology.

scholarly journals Sustainable Supply Chain Decisions under E-Commerce Platform Marketplace with Competition

2021 ◽  
Vol 13 (8) ◽  
pp. 4162
Author(s):  
Junbin Wang ◽  
Xuan Gao ◽  
Zhiguo Wang
Keyword(s):  
Supply Chain ◽  
Theoretical Model ◽  
Analytical Framework ◽  
Third Party ◽  
Pricing Strategy ◽  
Green Product ◽  
Sustainable Supply Chain ◽  
Green Products ◽  
Game Theoretical Model ◽  
Product Entry

Motivated by the industrial observation that the e-commerce platform marketplaces (e.g., Amazon) are increasingly launching sustainable strategies, this study aims to build an analytical framework to guide managers on making sustainable decisions. This study builds a stylized game-theoretical model in the sustainable supply chain context, where the competitive traditional product manufacturers sell their products through the platform’s marketplace, while the platform decides whether to introduce the green products and the pricing strategy. We find that, when the evaluation difference for the green product is sufficiently low, the introduction of the green product by the platform benefits the manufacturers (or third-party sellers). Interestingly, a higher platform fee makes a higher likelihood of a win-win situation between the platform and manufacturers. Moreover, when consumers value green products sufficiently higher than traditional products, the traditional products’ manufacturers can also benefit from the green product entry.

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