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Shared Social Responsibility: A Field Experiment in Pay-What-You-Want Pricing and Charitable Giving

The Greater Good Zero-sum games (if I win, then you lose) offer an easily grasped heuristic for all sorts of social interactions, especially those that involve money. For instance, companies may offer to contribute some portion of their revenues to charitable causes as an inducement to customers, but it is generally assumed that these pass-throughs directly diminish the corporate bottom line. Gneezy et al. (p. 325; see the Perspective by DellaVigna) have designed a framework that encourages both customers and companies to contribute toward social goods, and, in field tests, this design increased charitable contributions as well as corporate revenues. Exchanging goods for money ends up benefiting buyers, sellers, and charities. A field experiment (N = 113,047 participants) manipulated two factors in the sale of souvenir photos. First, some customers saw a traditional fixed price, whereas others could pay what they wanted (including $0). Second, approximately half of the customers saw a variation in which half of the revenue went to charity. At a standard fixed price, the charitable component only slightly increased demand, as similar studies have also found. However, when participants could pay what they wanted, the same charitable component created a treatment that was substantially more profitable. Switching from corporate social responsibility to what we term shared social responsibility works in part because customized contributions allow customers to directly express social welfare concerns through the purchasing of material goods.