Understanding the Determinants and Outcomes of Internal Reference Prices in Pay-What–You-Want (PWYW) Pricing in Tourism: An Analytical Approach

Abstract

A coherent body of research recognizes the importance of pay-what-you-want (PWYW) pricing in marketing. However, while numbers of research of PWYW pricing exist in marketing, empirical investigation of PWYW pricing in tourism has received less attention. Accordingly, this research investigates the antecedents and consequences of internal reference price (IRP) in PWYW pricing in tourism. The mediating role of IRP is also explored in this research. This research was conducted using data collected from 337 tourists purchasing souvenir products from multiple tourists’ destinations. Confirmatory factor analysis and structural equation modeling found that altruism and social desirability have a positive effect and price consciousness has a negative effect on IRP in tourism. Similarly, IRP has a positive effect on willingness to pay and future purchase intention. IRP also have a mediating effects on the relationships between antecedents and outcome variables. This paper contributes by examining the innovative pricing in tourism marketing.