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Good For Charity, Good For Business

[ 5 ] July 22, 2010 | Sam McDougle

An article in the latest issue of Science argues that pay-what-you-want pricing schemes, when combined with charitable donations, increase profits for sellers and charities.  Ayelet Gneezy et al, carried out a study on over 100,000 theme parkers. They manipulated two price-schemes for “souvenir photos:”  One group could “pay what they want” ($0-whatever), the other paid a fixed price (i.e. $5.00).  Additionally, half of each group was told that a large portion of their money was going to charity. Intriguingly, the group with the pay-what-you-want choice not only raised more money for chairty, but maximized profits for the amusement park as well.

In addition to offering a new strategy and incentive for firms to donate to charity, this article also sheds light on the psychology of philanthropy — “Free-riding” (paying $0) was decreased by the philanthropic factor. It appears that individuals are more likely to choose to pay a lot of money for an item if its cost is flexible and it’s “the right thing to do.”

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  1. [...] This post was mentioned on Twitter by Carol Sanford, Neuro Now. Neuro Now said: Good For Charity, Good For Business: An article in the latest issue of Science argues that pay-what-you-want prici… [...]

    • Mary says:

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    • Sedef says:

      Gorgeous work Michelle! That family is truly biutuefal, I know they will cherish your images! And Miss A in that bowl is to die for! I can see her personality shining through. Of course your newborn work is stunning, and this little one is no exception. Nice job!

    • Nicole says:

      I’m sure his parents love these even more than I do what a pecreft Christmas gift (both the images and the baby!). Have a wonderful and restful holiday Michelle!

      • Newman says:

        I dont believe in CHARITY DONATIONS or HELP. Everything is cisatilapm. Give and you will get. Nature is that way. There is no free thing. You need to close Red Cross Lions Club etc . Instead do useful works like SIRUTHULI in Coimbatore (cleaning water reservoirs to harvest rain water), RWH (rainwater harvesting in Chennai), SULABH (creating public restrooms for hygiene), these are useful for the people. ANUBHAV (plant trees on the side of the roads). I didnt say, feed poor people etc. That is something they must work and earn themselves. No Free TV’s. No Free Eggs. No Free Food in the name of Sathunavu etc. Your parents must work and with the money earned they must send you to decent school for you to study. As such, the schools must not collect donations and overcharged fees If everybody does everything proper then the world will be a better place.. Everybody is living in metaphors and imaginary worlds That is the problem

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