An investigation of the pay-what-you-want concept in a performing arts competition

The treatments comprise a control group without any monetary incentive for participation, an offer to win a voucher by 1/10 chance and provision of a discount for a complementary service during the event. The treatments take place in three consecutive shows in September 2019.

Three different treatments are implemented to investigate incentive effects on the readiness to participate in our survey. In three consecutive weeks, visitors will be invited to participate in the survey through an invitation card. To participate in the survey, visitors are provided with a QR-code on the invitation card, as well as with the direct web-address of the questionnaire. They are asked to participate in the survey via their smartphone.
The first week represents the control, here we politely invite the visitors to participate in our survey. There is no further incentive for participation.
In the second week, we offer a 1/10 chance to win a voucher for an online mail-order business with 20 Euros value.
In the third week, the invitation letter serves as a voucher for a 2 Euro discount for any drink at the bar. In the second treatment participation in the survey is necessary to take part in the lottery. In the third treatment, the discount is granted independent of participation in the survey.

We conduct a field experiment in an open-stage performing arts competition by allocating survey invitations. The survey aims to identify different types of visitors regarding their pay-what-you-want pricing motivation regarding the performers’ rewards. We distinguish with respect to the motivational factors of public good awareness, reciprocal motives, and competitive preferences. Different questions in the survey are meant to assess the respondents’ characteristics by adding up to indicator values. To assess the reliability of the different indicators, we assume that preferences are consistent. From these factors causalities with respect to the willingness to pay, the readiness for participation in the survey and expectations towards the other visitors’ payment behavior shall be derived. Additionally, questions about individual budget restrictions and personal interest in arts are included as controls. To investigate differences in the readiness for participation, we apply different treatments in three consecutive shows. The treatments comprise a control group without any monetary incentive for participation, an offer to win a voucher by 1/10 chance and provision of a discount for a complementary service during the event.
To control for differences in the quality of the show induced by the random composition of performances, the survey has to be completed until the break of the show.
There are 150 seats available at the venue, thus we can distribute a maximum of 150 invitations in each session.

Hypotheses:
Regarding the treatment effect:

We expect a higher participation in the treatments compared to the control.
We expect a higher share of reciprocally motivated participants in treatment 3.
We expect an over-representation of female respondents (we will be able to observe the empirical gender composition of visitors).

Our hypotheses regarding the survey responses on the readiness to contribute are as follows:

Respondents with distinct reciprocal motives are expected to state to make higher contributions compared to the other respondents. They are expected to have relatively lower empirical expectations regarding the other visitors’ contributions.

Respondents with a great public good valuation are expected to state higher expectations regarding the contributions of the other visitors. We expect that their stated personal readiness to pay is relatively lower.

We expect a positive relation between the stated willingness to pay and the average indicator values, i.e. respondents who agree with more of the indicator statements state to make higher payments.

We expect that respondents with a tighter budget constraint state a lower readiness to contribute.

We include questions about the assessment of public subsidization for performing arts in Germany. We randomly allot a question where the amount of spending has to be personally estimated to one-half of the respondents and give the actual number published by the Federal Office of Statistics of Germany (Statistisches Bundesamt (2018). Kulturfinanzbericht 2018. Statistische Ämter des Bundes und der Länder.) to the other half of respondents. Both are followed by the request to state whether public spending is too high, appropriate or too low. Respondents always can state that they are not able to make an assessment.
Respondents who asses subsidies as too high are expected to state a relatively lower willingness to pay
Respondents who state a high interest in arts are expected to have a greater ability to assess the amount of public spending.

2019-09-09

2019-09-30

Survey participants’ payment stated motivation (indicators for public good awareness, reciprocal motives, competitive preferences) to contribute;
Personally stated willingness to contribute;
Empirical expectations towards the other visitors’ willingness to contribute;
Normative expectations towards the other visitors’ willingness to contribute;
Individual assessment of (and ability to assess) public expenses performing arts and music in Germany;
Composition and number of participants across the treatments
Empirical gender composition of the audience;
Empirical aggregate contributions

The indicators measuring the personal motivational factors are derived by different statements assigned to the respective categories. For each of the factors, we have defined six to nine statements for which selection or agreement sums up to the total manifestation of the indicator value, which we will normalize to a value between zero and one. We test for reliability of our indicator composition by assigning main statements indicating preferences for the respective factor.

An invitation to participate in a survey asking questions about the personal readiness and underlying motives to reward the performers in an open-stage competition is distributed among visitors of the respective show in three consecutive sessions. Three different treatments are implemented to investigate incentive effects on the readiness to participate in our survey. The treatments comprise a control group without any monetary incentive for participation, an offer to win a voucher by 1/10 chance and provision of a discount for a complementary service during the event.
The questions in the survey aim to differentiate respondent types regarding different motivational factors to contribute to the artists' rewards by applying pay-what-you-want pricing. We distinguish with respect to the motivational factors of public good awareness, reciprocal motives, and competitive preferences. We relate the respondents’ stated motivations to their readiness to pay, his/her expectations about other visitors’ contributions and their participation in the survey.

All visitors of the three shows are invited to participate. We assume random selection into the treatment, as they are conducted in three consecutive weekly shows. We will track the timing of responses in order to account for possible quality effects of the show. It will be possible to participate either directly before the show, or during the break of the show.

Within the survey, randomization with respect to question allocation is obtained electronically through the SoSci-survey platform. We allocate two different equation times 50:50 over all respondents.

Individual randomization across treatments and questions.

No

150 visitors in each of the three shows.

We expect a maximum of 450 observations (150 invitations in each of the three shows).

150 individuals in each treatment.