Cafe owner thrives with no-pricing policy

http://www.cnn.com/2009/US/03/17/lippert.qanda/index.html?iref=mpstoryview#cnnSTCText

by chaostheory • 17 years ago

17 18 17 years ago

HSO• 17 years ago

Interesting that people will pay what the owner says they do, when in physical proximity, and totally exploit the creator's friendliness when it comes to "donationware".

inerte2• 17 years ago

Maybe someone running somekind of website where donations are accepted could run this experiment: Put on your sign-up/logout or download page a donate feature, and pictures of you next to your children/pets/dependent whatever, or a picture of your old car/tv and some text saying "I'm looking for money to replace this", etc.

I think physical proximity is a factor, but the emotions involved are more like "I can't screw the guy" and "I should help the guy" or "I should be a good person and do this", so if you can make these feelings emerge...

sidsavara• 17 years ago

I read one study that showed having eyeballs (e.g., a picture of someone looking at you) next to the cash box increased deposits by some N% (I don't want to spout facts as I can't recall the number, but it was n > 10 - double digit percentage increase). They controlled for there just being a picture by alternating pictures of eyeballs with pictures of flowers.

I suspect part of it may be due to people showing up just for the novelty of it, but going back to the eyeball study (which I am too lazy to look up the reference for) I wonder if there is another thing at play too. Perhaps people think oh cool, let's show up and game the system, and they make plans to go there intending to perhaps pay 20% less than market.

Then they have to look the owner in the eye and tell him what they think is fair, and for whatever reason their mind changes. So rather than paying .8x, like they originally intended, they end up paying instead x - 1.2x

So you get increased business because people who were willing to pay .8x (lets say x = $10 based on the article, so $8) show up, and end up spending x - 1.2x ($10-12, per the article). Some portion of new customers may see that their game won't work (because they don't want to lie to the owner) and they just leave. No harm done - these people weren't eating at the cafe to begin with.

So I chalk at least part of this up to a neat psychological trick - but I wonder if many of those people will be repeat customers (some portion obviously will).

Anybody have references to back this up? This is just what I suspect may be happening, as it's what I susepct happened with folks who may have intended to steal bagels/candy from the office kitchen, saw the eyeballs and ended up paying for them instead.

alecst• 17 years ago

Link to referenced study: http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=16...

orblivion• 17 years ago

I understand how guilt can keep a lot of people from gaming the system too hard, but what about really desperate people (homeless people, for instance)? You'd think they'd eat there constantly, once they heard of it, and drive the place under.

triplefox• 17 years ago

The owner retains the right to refuse service.

jodrellblank4• 17 years ago

So there is a price, but it's secret?

Sounds like the same scam as tipping to me. Get me there and I will pay/tip over the odds out of fear, guilt, social pressure. But I will try to avoid going as putting that hassle and discomfort on me doesn't make for a pleasant customer experience.

Celcius• 17 years ago

My first thought as other people have already noted was that I would be terribly guilt tripped and pay slightly above what I thought would be the average to make myself look good.

I do wonder however if people also pay more as a form of social-compensation and not guilt as they figure they are weighting up the cheap people.

This phenomenon would make an interesting study to read.

ken• 17 years ago

Terra Bite in Kirkland (about 5 blocks from Google) does this, too: http://www.terrabite.org/press.htm

Cafe owner thrives with no-pricing policy

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