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What are your thoughts on "pay what you wish" business models?

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Phriend posted on Mon, Sep 10 2012 2:20 AM

What do you think of "pay what you wish" business models?  In a business sense, do you think they work better or worse than the standard pricing models?

(Panera Bread started opening "pay what you wish" stores a few years ago, and they have said that their profits there are similar to their regular stores).

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In a way churches are like the "pay what you wish" businesses, they do pretty well, so this is a proof of concept that the "pay what you wish" model can work well. "Can" because I don't believe that the model will work under all circumstances, although if it's true that it works almost as well as the normal model for Panera, it looks more promising than I first thought it would be. Products such as food, something tangible, would on face value appear to be a bad business to use the "pay what you wish model" with, while less tangible "products" such as what churches "sell" would best work with the "pay what you wish" model. (Since your "product" isn't costing you like a more tangible product such as a hamburger would.) The overall mood of the community the business is located in would also play a part in how well it would work out, at least in theory, seeing as how a community which isn't in a position to be charitable wouldn't pay as much, possibly resulting in a net loss to the business. Like most things, I think whether the "pay what you wish" model will be successful or not (compared to the regular model), will depend on the circumstances.

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Merlin replied on Mon, Sep 10 2012 4:25 AM

I’m guessing it might work out for a few specific businesses selling, on a massive scale relatively cheap stuff. But as an alternative to ‘sound’ pricing I find it ridiculous. The longer such models will be in effect, the less will people recognize what a ‘fair’ price should be and will feel entitled to the service/good provided. 

The Regression theorem is a memetic equivalent of the Theory of Evolution. To say that the former precludes the free emergence of fiat currencies makes no more sense that to hold that the latter precludes the natural emergence of multicellular organisms.
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