Pay-What-You-Want (PWYW) is a participative pricing mechanism which is characterizedby the fact that consumers have maximum control over the price they pay. We discuss thebusiness relevance of PWYW and extend the findings of Kim et al. (2009) using latentclass regression. Two different classes...

Pay-What-You-Want (PWYW) is a new participative pricing mechanism whereby consumershave maximum control over the price they pay. Previous research suggests that participativepricing increases consumers’ intent to purchase. Sellers using PWYW face the risk, however,that consumers exploit their...