‘If I can set my own price for tonight’s show I will pay more after watching it!’ – evidence from Pay What You Want experiment

ABSTRACT

In a field experiment conducted in cooperation with city theatres in Warsaw, we allowed some of the visitors to pay whatever they wanted for the tickets. Half of these visitors were asked randomly to make a voluntary payment after (instead of before) the performance. We found a significant positive difference between payments made after and before the show. In a specially designed survey we capture factors that may potentially explain this difference: the visitors’ general expectations towards the performance and different aspects of the audience experience.

KEYWORDS:

• Pay What You Want
• cultural goods
• uncertainty
• experience goods

JEL CLASSIFICATION:

• Z19
• C93

Acknowledgements

This article has received valuable comments and language correction from Peter Szewczyk. This work was supported by the National Science Centre [grant number UMO-2014/14/E/HS4/00389].

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The only analysis on the difference in PWYW ex ante and PWYW ex post consumption payments which we found was an online pre-test survey with hypothetical payments made by Kim, Kaufmann, and Stegemann (2014).

² Price of a normal ticket in Studio Theater varies from 35 PLN (8.35 EUR) to 100 PLN (23.80 EUR), with an occasional promotion tickets for 20 PLN (4.75 EUR). The prices in Ochoty Theater are fixed at 30 PLN (7.15 EUR) for regular and 20 PLN (4.75 EUR) for reduced ticket. To ensure comparability of the data collected within each of the theatres, we examined only plays of deliberately selected drama performances.

³ After the end of the experiment, we asked (through an online survey) persons who have confirmed coming to the show but finally did not come about the reason to change their decision. Almost 90% of them answered the questionnaire. The most commonly given reason was: ‘Unfortunately, the date no longer suits for me’ (answer given by 56% of the respondents).

Additional information

Funding

This work was supported by the National Science Centre [UMO-2014/14/E/HS4/00389].