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Consumer Elective Pricing Summary

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This article is about explaining why people pay more when paying for others. It is said in the article that people tend to be self-interested. But when it comes to other people, sometimes they become surprisingly generous. It may be because of the influence (especially social influence) of the people surrounding him or the norms that are being practiced in his environment. Another reason is that they consider their self-image and self-identity when paying for themselves or paying for other people. Because of that, people have a tendency to feel obligated to pay more even if they are given a chance not to do so. As you read more in the article, you can see how the influence of your surroundings can greatly affect your decisions and behavior …show more content…

A certain practice was discussed in this article, and that is “Consumer Elective Pricing.” As it is defined in the article, it is “any commercial transaction, in which the buyer can pay any price for a good or service. Furthermore, it offers an opportunity to test the extent to which people deviate from pure self-interest in transactions that are both commercial and social. It provides a conservative setting for evaluating generous behaviors.” Under the Consumer Elective Pricing, there are two practices that were compared. Those are “Pay What You Want (PWYW)” and “Pay It Forward (PIF).” The pay-what-you-want (PWYW) pricing is the well-documented form of consumer elective pricing. Pay-what-you-want (PWYW) pricing is where people get to decide how much they want to pay for something. While in Pay-it-forward, it is not commonly used but it still exists. Pay-it-forward (PIF) pricing is where people are told that someone else has paid for them, and they have the opportunity to pay what they want for the next person. They are still given a chance to selectively choose any price they want, but the payment is treated differently. The relationship developed by these two practices is different. In

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