Understanding the impact of informative contact in Pay-What-You-Want pricing: a sequential mediation analysis

Abstract

This study aims to enhance understanding of the Pay-What-You-Want (PWYW) pricing model by exploring how informative contact with beneficiaries (ICB) influences consumers’ willingness to pay (WTP). Utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM) with a sample of 307 respondents, the research suggests that the impact of ICB on WTP is mediated by two factors: perceived control (PC) and reciprocity concern (RC ), both individually and sequentially. Specifically, ICB increases perceived control, positively affecting reciprocity concern and leading to a higher willingness to pay. These findings highlight the significance of emphasizing the prosocial effects of consumer payments in PWYW scenarios, as this can indirectly encourage consumers to pay more. The results contribute to the literature on participative pricing models and offer practical insights for businesses by revealing the psychological mechanisms that influence payment decisions in PWYW contexts.