The role of social crowding in pay-what-you-want pricing

Despite the pervasiveness of pay-what-you-want pricing in the travel and hospitality industry, tourism scholars have devoted little effort to investigating the effectiveness of this pricing scheme. The current research examines the joint effect of social crowding (crowded vs. non-crowded) and self-construal (interdependent vs. independent) on tourists' pay-what-you-want payments. The results indicate that crowding lowers payment amounts among individuals high in interdependent self-construal, but such an effect is not observed among people high in independent self-construal. Furthermore, the mediation analysis shows that self-dehumanization is the psychological mechanism underlying the negative crowding effect. The research findings help tourism operators to realize when and why social crowding lowers people's pay-what-you-want payments, thus enhancing the effectiveness of pay-what-you-want pricing.