Participatory Pricing in Sport: An Examination of Name-Your-Own-Price and Pay-What-You-Want Pricing

The purpose of this study is to better understand the effects participatory pricing strategies have on consumer perceptions and behaviors in a sport event pricing scenario. Participatory pricing strategies are those that include the consumer in setting the final price of a good or service. These mechanisms include name-your-own-price (NYOP) and pay-what-you-want (PWYW). These pricing strategies are now being introduced into the sport industry. With the increased use of these strategies, and the lack of research in sport management pertaining to consumers? perceptions of price, specifically consumer voice in price setting, there is a gap in the literature that needs to be filled. This study investigates the consumer?s perceptions of price fairness, perceived value, as well as consumer behavior (i.e. purchase intentions and willingness-to-pay), when encountering participatory pricing strategies.

The following dissertation presents a quantitative experimental design, asking subjects to participate in a simulated ticket purchase experience. Difference between experimental groups was assessed based on price fairness, perceived value, willingness-to-pay, and purchase intentions.

Results indicate there is a significant difference between participatory pricing groups and traditional fixed price groups when examining price fairness, perceived value, willingness-to-pay, and final average prices paid. Specifically, price fairness evaluations were significantly higher for the PWYW and fixed price groups, and lower for the NYOP group.

In addition to the price fairness differences, the groups differed on their evaluations of perceived value (PWYW and fixed are the same, both higher than NYOP). Furthermore, the results reveal that consumers involved in the NYOP mechanism evoked higher levels of willingness-to-pay than PWYW and fixed.

Furthermore, the study also found that the final average price paid following the experiment differed based on the mechanism. The PWYW and fixed price mechanisms paid similar amounts, while both of them were significantly higher than the NYOP mechanism. This suggests that while one of the biggest concerns for the PWYW treatment is a low final average price (even $0); this may not be an issue in a sport ticket pricing scenario. Study limitations and future research are included in the following dissertation.