Paying More When Paying for Others

Journal of Personality and Social Psychology, Forthcoming

85 Pages Posted: 3 Dec 2013 Last revised: 6 Oct 2019

See all articles by Minah Jung

Minah Jung

New York University (NYU) - Department of Marketing

Leif D. Nelson

University of California, Berkeley - Haas School of Business

Ayelet Gneezy

University of California, San Diego (UCSD) - Rady School of Management

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management

Date Written: December 2, 2013

Abstract

Social behavior is heavily influenced by the perception of the behaviors of others. We consider how perceptions (and misperceptions) of kindness can increase generosity in economic transactions. We investigate how these perceptions alter behavior in a novel a real-life situation which pits kindness against selfishness. That situation, consumer elective pricing, is defined by an economic transaction allowing people to purchase goods or services for any price (including zero). Field and lab experiments compared how people behave in two financially identical circumstances: pay-what-you-want (in which people are ostensibly paying for themselves) and pay-it-forward (in which people are ostensibly paying on behalf of someone else). In four field experiments people paid more under pay-it-forward than pay-what-you-want (Studies 1-4). Four subsequent lab studies assessed whether the salience of others explains the increased payments (Study 5), whether ability to justify lowered payments (Study 6), and whether the manipulation was operating through changing the perceptions of others’ (Studies 7 and 8). When people rely on ambiguous perceptions, pay-it-forward leads to overestimating the kindness of others and a corresponding increase in personal payment. When those perceptions are replaced with explicit descriptive norms (i.e., others’ payment amounts), that effect is eliminated. Finally, subsequent studies confirmed that the effects were not driven by participant confusion (Studies 9A and 9B) and not limited by the specificity of the referent other in the PIF framing (Study 9C).

Keywords: altruism, social preferences, generosity, pay what you want, social norms, pluralistic ignorance

Suggested Citation

Jung, Minah and Nelson, Leif D. and Gneezy, Ayelet and Gneezy, Uri, Paying More When Paying for Others (December 2, 2013). Journal of Personality and Social Psychology, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2362643

Minah Jung (Contact Author)

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States

Leif D. Nelson

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Ayelet Gneezy

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

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