Pay-what-you-want pricing
Let buyers set the price, and fairness norms keep it above zero.
What it means
A pricing model in which buyers decide how much, if anything, to pay for a product, relying on internalized fairness norms, reciprocity, and self-image rather than a fixed price to generate revenue. Contrary to the prediction that everyone pays nothing, many people pay positive and even generous amounts, especially when the seller is sympathetic, the relationship is ongoing, or a portion goes to charity. Outcomes depend heavily on reference prices, social presence, and the perceived cost to the seller. It matters as a striking demonstration that pricing is governed by social preferences, not just self-interest.
Examples
Diners at a pay-what-you-want cafe often leave more than a fixed price would have been, out of fairness.
Radiohead released In Rainbows as a name-your-price download. Many fans who could legally have typed zero paid real money anyway, moved by fairness and goodwill rather than any price tag.
A museum's suggested-donation desk takes more when a volunteer hands you the ticket face to face than when an unattended box sits by the door — being seen makes the fairness norm bite.
First described in Studied by Kim, Natter & Spann (2009); Gneezy et al. (2010, 2012).