Pay-What-You-Want (PWYW) is an innovative participative pricing strategy in which consumers determine the price they want to pay for a product or service. Past research mainly focuses on individual variables as antecedents of consumers’ willingness to pay under PWYW pricing and ignores the role of situational factors. We address this gap by investigating the effects of three situational factors, perceived crowding, involvement level and time pressure, on consumers’ PWYW pricing decisions. Pay-what-you-want (PWYW) is an innovative pricing mechanism that gives consumers maximum control over the price setting process, and thus allows buyers to entirely determine the price for their desired product or service (Schmidt, Spann & Zeithammer, 2014). The buyer has the authority to choose any price to pay for the offered product or service and there is no minimum price to protect the seller (Kahsay & Samahita, 2015). Such increased perceived control on the final price induces consumers to greater purchase intentions (Chandran & Morwitz, 2005). Hence, a growing number of firms in different industries such as music, museums, software, and charity sales are using PWYW pricing (Schmidt, Spann & Zeithammer, 2014). Internal reference price (IRP) is defined as a price in the buyers' memories that serves as a basis for judging or comparing actual prices (Monroe, 1973; Monroe, Grewal, & Compeau, 1991). In the context of PWYW involvement has a negative effect on prices paid. Involvement is the level of personal relevance consumers possess regarding a product or a purchase decision (Zaichkowsky, 1985). Involvement is conceptualized as both, an individual difference variable representing an “enduring interest” in a given product (Roy, 2015; Bloch & Richins, 1983). It is also posited that the negative effect of involvement on IRP will be further moderated by perceived crowding. Perceived crowding is often described in negative terms as a confined, constrained, and restricted physical setting; and it has two distinct dimensions, spatial crowding and human crowding (Machleit et al., 2000; Byunn & Mann, 2011). A crowded shopping environment is also incompatible with the consumers’ shopping desires and goals; hence consumers exhibit unfavorable shopping behavior such as spend less time in the store (Machleit et al., 2000; Li, Kim & Lee, 2009). Perceived crowding should therefore negatively influence consumers’ involvement and IRP, thereby affecting the money they are willing to pay in PWYW situation.

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