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Antecedents, outcomes, and mediating role of internal reference prices in pay-what-you-want (PWYW) pricing

Rajat Roy (Curtin University, Perth, Australia)
Fazlul K. Rabbanee (Curtin University, Perth, Australia)
Piyush Sharma (Curtin University, Perth, Australia)

Marketing Intelligence & Planning

ISSN: 0263-4503

Article publication date: 1 February 2016

Issue publication date: 1 February 2016

1963

Abstract

Purpose

The purpose of this paper is to explore the mediating role of internal reference price (IRP) in a pay-what-you-want (PWYW) price setting. Specifically, it examines the effects of altruism, social desirability and price consciousness as the antecedents of IRP and consumers’ willingness to pay (WTP), future purchase intention and attitude toward the seller as the outcomes of IRP.

Design/methodology/approach

The data for the study were collected from 272 respondents through a structured survey and analyzed through structural equation modeling technique using AMOS 22.0.

Findings

Altruism and social desirability positively influence IRP whereas price consciousness influences IRP negatively. IRP mediates the effects of altruism, social desirability and price consciousness on WTP, future purchase intention and attitude toward the seller.

Research limitations/implications

PWYW pricing strategy can help attract consumers with self-less characteristics or a desire to behave in a socially appropriate manner but not those who are highly price conscious as reflected by the differences in the way in which their IRPs influence their WTP, future purchase intention and attitude toward the seller.

Originality/value

This paper introduces a parsimonious framework to explain how three consumer characteristics influence consumers’ pricing decisions in PWYW context. The finding that the effects of antecedent variables on WTP, attitude and future purchase intention are mediated by IRP provides new insights that have not been explored earlier.

Keywords

Acknowledgements

Corrigendum It has come to the attention of the publisher that Table 2 of the article “Antecedents, outcomes, and mediating role of internal reference prices in pay-what-you-want (PWYW) pricing” published in Marketing Intelligence & Planning Vol. 34 No. 1, 2016 pp. 117-136 contained errors in the calculation of the average variance extracted (AVE) and Composite Reliability (CR) for all constructs. Table 2 has now been updated in the online version of the paper. The authors sincerely apologise for these calculation errors.

Citation

Roy, R., Rabbanee, F.K. and Sharma, P. (2016), "Antecedents, outcomes, and mediating role of internal reference prices in pay-what-you-want (PWYW) pricing", Marketing Intelligence & Planning, Vol. 34 No. 1, pp. 117-136. https://doi.org/10.1108/MIP-08-2015-0157

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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