We're not freeloaders at heart, even when given a choice.
You might be momentarily stunned when you enter the local Panera Bread in Clayton, Missouri. Instead of cash registers, the bakery uses donation boxes, and there's not a price tag in sight. Through an experimental pay-what-you-want system at a few of the company's 1,000-plus locations, the customers ante up whatever they think a product is worth, depending on what they can afford. And a funny thing is happening: People are actually paying.
Merel van Beeren is a journalist and photographer. She is originally from the Netherlands, and obtained BA and MA degrees in Religious Studies – Islam at the University of Amsterdam. She is currently pursuing a MA in the Global Journalism and Near Eastern Studies program at New York University.
Editor: Talha Khalid
When put in control of pricing, customers are not ruled by greed alone, studies at the University of California at San Diego have found. If anything, they seem more inclined to give and less enthusiastic about taking. "Everyone assumes that others pay more, and they want to look more or at least as generous," says marketing professor Ayelet Gneezy.
In an experiment at a restaurant in Germany, customers ended up paying much more than they initially wanted to. People don't like to look cheap in front of their friends, or like they're cheating the owner out of his fair share, says study coauthor Martin Natter, a researcher at the University of Frankfurt.
Even when the contribution is anonymous, people still pony up. "If you want to see yourself as an honest, decent person, you pay," says Gerhard Riener, a behavioral economist at the University of Jena, Germany. The desire to preserve our image—especially our self-image—supersedes the temptation to be greedy.
In a TED talk on his company's pay-what-you-want approach, Panera chairman Ron Shaich called it "a test of humanity. Would they show up? Would they leave money?" While one cafe in a poorer neighborhood had to close, two of the chain's three pay-as-you-wish locations have managed to stay afloat.
Last November, Paula Dourales, owner of a Greek restaurant in a gentrified corner of Brooklyn, also started letting diners set their own prices. Her friends and family worried that people would abuse the system, but Dourales says she could count the freeloaders on one hand. Still, the restaurant recently returned to conventional pricing—a more comfortable option for a crowd of hyperskeptical New Yorkers. "They kept asking, 'What's the catch?'" says Dourales, laughing. "'How much is this going to cost me?'"