Paying More When Paying for Others
Minah H. Jung and Leif D. NelsonUniversity of California, Berkeley
Ayelet Gneezy and Uri GneezyUniversity of California, San Diego
Social behavior is heavily influenced by the perception of the behaviors of others. We considered howperceptions (and misperceptions) of kindness can increase generosity in economic transactions. Weinvestigated how these perceptions can alter behavior in a novel real-life situation that pitted kindnessagainst selfishness. That situation, consumer elective pricing, is defined by an economic transactionallowing people to purchase goods or services for any price (including zero). Field and lab experimentscompared how people behave in 2 financially identical circumstances: pay-what-you-want (in whichpeople are ostensibly paying for themselves) and pay-it-forward (in which people are ostensibly payingon behalf of someone else). In 4 field experiments, people paid more under pay-it-forward thanpay-what-you-want (Studies 14). Four subsequent lab studies assessed whether the salience of othersexplains the increased payments (Study 5), whether ability to justify lowered payments (Study 6), andwhether 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 ofothers and a corresponding increase in personal payment. When those perceptions are replaced withexplicit descriptive norms (i.e., others payment amounts), that effect is eliminated. Finally, subsequentstudies confirmed that the effects were not driven by participant confusion (Studies 9A and 9B) and notlimited by the specificity of the referent other in the pay-it-forward framing (Study 9C).
Keywords: altruism, social preferences, pay what you want, social norms, pluralistic ignorance
Supplemental materials: http://dx.doi.org/10.1037/a0037345.supp
People are self-interested, but they can also be surprisinglygenerous toward others. As economists and psychologists note,even in environments that promote material self-interest, peopleare frequently kinder than purely self-interested, conforming to thenorms of fairness and reciprocity (Andreoni & Miller, 2002; Char-ness & Rabin, 2005; Falk & Fischbacher, 2006; Fehr & Schmidt,1999; Rabin, 1993). While people look to social norms to guidetheir behavior, social norms can be often ambiguous in unfamiliaror uncertain social contexts. In these situations, individuals beliefsabout the behavior of others could be influential (Cialdini, Kall-gren, & Reno, 1991; Cialdini & Trost, 1998; Sherif, 1936). The
present research considers how social forces can increase kindnessby influencing the perceptions of others. In particular, we inves-tigated how implicit information about others generous behaviorinfluences the level of generosity. Our findings operate in a rela-tively narrow domain (consumer elective pricing), but as we iden-tify throughout the article, this domain offers opportunities tocapture changes in kindness despite meaningful financial incen-tives pushing in the opposite direction.
People look to the behavior of others to decide how to behavethemselves. They use others to learn about the relevant social norms(Cialdini et al., 2006; Cialdini, Reno, & Kallgren, 1990; Goldstein,Cialdini, & Griskevicius, 2008). Social norms are defined as therules and standards that are understood by members of a group, andthat guide and/or constrain social behaviors without the force of laws(Cialdini & Trost, 1998). Although a single situation may be guidedby different norms, people follow those focal in their attention (Reno,Cialdini, & Kallgren, 1993). The simplest of norms are descriptivenorms, which contain information about the behavior of others (Cial-dini & Trost, 1998). Descriptive norms simplify social decision mak-ing by indicating justifiable course of action even under powerfuluncertainty (Deutsch & Gerard, 1955; Sherif, 1936; Tesser, Campbell,& Mickler, 1983). Accordingly, when descriptive norms are madeexplicit, they can be very influential. People litter more in a litteredenvironment presumably because they have learned that other peopleare littering (Cialdini et al., 1990; Keizer, Lindenberg, & Steg, 2008),and they hang their towels up more often when they find that otherguests are hanging up their towels too (Goldstein et al., 2008). Beliefsabout others influence how we decide to behave ourselves.
Minah H. Jung and Leif D. Nelson, Haas School of Business, Universityof California, Berkeley; Ayelet Gneezy and Uri Gneezy, Rady School ofManagement, University of California, San Diego.
The first author is supported by the National Science Foundation (NSF)Graduate Research Fellowship and the Greater Good Dissertation Fellow-ship. The second author was supported by the Barbara and Gerson BakarFaculty Fellowship. Both of those authors were supported by a grant fromthe Garwood Center for Corporate Innovation. The project was supportedby NSF Grant SES-1124610. The authors want to thank Silva Kurtisa ofthe Haas Behavioral Lab, Summerlea Kashar of the Cartoon Art Museum,Ola Robert Hassan of Olas Corner, Nipun Mehta of Karma Kitchen, andundergraduate research apprentices of the Science of Giving and Appre-ciating Lab for their persistent and kind support.
Correspondence concerning this article should be addressed to Minah H.Jung, Haas School of Business, University of California, Berkeley, 545Student Services Building #1900, Berkeley, CA 94720-1900. E-mail:email@example.com
Journal of Personality and Social Psychology 2014 American Psychological Association2014, Vol. 107, No. 3, 414431 0022-3514/14/$12.00 http://dx.doi.org/10.1037/a0037345
People are also influenced by their interpretations of others be-havior, but that means that they may be vulnerable to their ownmisinterpretations. Pluralistic ignorance is one way in which peoplemisunderstand social norms. People see a common or consensusbehavior in others and infer an underlying social norm, but sometimesthat inference is inaccurate. Under pluralistic ignorance, everyonemight behave similarly, but an observer believes that the observed aredoing so out of adherence to a different norm (Miller & McFarland,1987). Accordingly, people follow the behaviors of others even whenthey falsely perceive their own attitudes and judgments to be quitedifferent (Allport, 1924; Prentice & Miller, 1993).
With such a potential misperception in mind, we asked, Howdoes social perception influence personal prosocial behavior? Dopeople correctly estimate the level of others generosity (or self-ishness) in economic exchanges? A small number of studies haveinvestigated peoples perceptions of others prosocial behaviors incontexts where their pure self-interest motive is relevant andsalient. Some studies have suggested that people overestimateunderlying self-interest, for example, inferring that others donateblood for financial incentives (Miller & Ratner, 1998). Otherstudies started with a similar bias (Other people are more selfishthan I am) but revealed error in self-perception: the observerswere just as selfish as the people they observed (Epley & Dunning,2000). When it comes to prosocial spending, people think thatothers are less likely to spend and choose to spend less.
When the prosocial trappings are stripped away, people spon-taneously judge others to be much more willing to part ways withtheir money. When estimating how much others would be willingto pay for goods, people consistently believe that others would paymore (Frederick, 2012). In combination with these observations,we can see that there are substantial misperceptions of others, butthe direction of that misperception is substantially guided bycontext. In this article, we consider behavior in a context that issomewhat prosocial and somewhat commercial. As we demon-strate, that combination allows for a mixture of misperception andsocial influence that prompts more generous behavior.
Consumer Elective Pricing: Pay-What-You-Want andPay-it-Forward
The context for our investigation was consumer elective pricing.Consumer elective pricing, as we defined it here, is any commercialtransaction in which the buyer can pay any price for a good or service.Consumer elective pricing offers an opportunity to test the extent towhich people deviate from pure self-interest in transactions that areboth commercial and social. Maximizing immediate self-interestwould move people to pay zero, whereas considering others welfare(e.g., sellers) would push them to pay more. Furthermore, consumerelective pricing provides a conservative setting for evaluating gener-ous behaviors because such behaviors necessarily come at directlymeasurable personal costs (i.e., they are incentive compatible).
The most well-documented form of consumer elective pricing ispay-what-you-want (PWYW) pricing. PWYW has received muchpopular and academic attention. A precipitating event came in therelease of (British popular music artist) Radioheads album InRainbows in 2007. The band released the album as a pay-what-you-want download and was rewarded with one of their mostfrequently purchased albums. Since Radioheads PWYW albummade headlines, more independent