Interactive effects of situational and enduring involvement with perceived crowding and time pressure in pay-what-you-want (PWYW) pricing

Piyush Sharma*, Rajat Roy, Fazlul K. Rabbanee

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This paper explores the differences in the interactive effects of situational and enduring involvement with perceived crowding and time pressure on customers’ PWYW pricing decisions. Two empirical studies, an online experiment about a hair salon using PWYW pricing and a field-survey with customers of a real-life PWYW restaurant, are used to test all the hypotheses. In study one, situational involvement has significant direct and indirect effects on the customers’ allocation of internal reference prices to their PWYW prices (RATIO), whereas enduring involvement has a positive (negative) effect under low (high) situational involvement. In study two, both enduring and situational involvement have no significant direct effects on RATIO but situational involvement has a significant negative (positive) effect for participants with low (high) enduring involvement. Besides extending both PWYW and involvement literatures, these findings would help managers understand the direct and indirect effects of situational variables on customers’ PWYW pricing decisions.

Original languageEnglish
Pages (from-to)88-100
Number of pages13
JournalJournal of Business Research
Volume109
Early online date10 Dec 2019
DOIs
Publication statusE-pub ahead of print - 10 Dec 2019

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Crowding
Time pressure
Pricing
Direct effect
Indirect effects
Pricing decisions
Experiment
Reference price
Managers
Empirical study
Restaurants

Cite this

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title = "Interactive effects of situational and enduring involvement with perceived crowding and time pressure in pay-what-you-want (PWYW) pricing",
abstract = "This paper explores the differences in the interactive effects of situational and enduring involvement with perceived crowding and time pressure on customers’ PWYW pricing decisions. Two empirical studies, an online experiment about a hair salon using PWYW pricing and a field-survey with customers of a real-life PWYW restaurant, are used to test all the hypotheses. In study one, situational involvement has significant direct and indirect effects on the customers’ allocation of internal reference prices to their PWYW prices (RATIO), whereas enduring involvement has a positive (negative) effect under low (high) situational involvement. In study two, both enduring and situational involvement have no significant direct effects on RATIO but situational involvement has a significant negative (positive) effect for participants with low (high) enduring involvement. Besides extending both PWYW and involvement literatures, these findings would help managers understand the direct and indirect effects of situational variables on customers’ PWYW pricing decisions.",
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Interactive effects of situational and enduring involvement with perceived crowding and time pressure in pay-what-you-want (PWYW) pricing. / Sharma, Piyush; Roy, Rajat; Rabbanee, Fazlul K.

In: Journal of Business Research, Vol. 109, 01.03.2020, p. 88-100.

Research output: Contribution to journalArticleResearchpeer-review

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AB - This paper explores the differences in the interactive effects of situational and enduring involvement with perceived crowding and time pressure on customers’ PWYW pricing decisions. Two empirical studies, an online experiment about a hair salon using PWYW pricing and a field-survey with customers of a real-life PWYW restaurant, are used to test all the hypotheses. In study one, situational involvement has significant direct and indirect effects on the customers’ allocation of internal reference prices to their PWYW prices (RATIO), whereas enduring involvement has a positive (negative) effect under low (high) situational involvement. In study two, both enduring and situational involvement have no significant direct effects on RATIO but situational involvement has a significant negative (positive) effect for participants with low (high) enduring involvement. Besides extending both PWYW and involvement literatures, these findings would help managers understand the direct and indirect effects of situational variables on customers’ PWYW pricing decisions.

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