Generosity and goodwill really are infectious, a University of California study has found.
A study conducted by UC Berkeley and UC San Diego researchers found that when consumers were told a previous customer had already paid for their purchase and were then offered the opportunity to do the same for someone else, the consumers spent more money than those given the option to pay whatever price they wanted for their own purchase.
Coined “Pay It Forward” and “Pay What You Want,” the two pricing schemes were put to test in eight experiments. A total of 2,400 individuals at locations including Oakland’s Jack London Square farmer’s market, San Francisco’s Cartoon Art Museum and labs at UC Berkeley participated unknowingly, and, in every setting, a consistent chain of goodwill and higher spending was set off when consumers paid it forward.
“It’s assumed that consumers are selfish and always looking for the best deal,” lead study author Minah Jung said. “But when we gave people the option to pay for someone else, they always paid more than what they paid for themselves.”
While becoming acquainted with the person who paid for them made no difference in how much consumers spent, the researchers did find that they paid more when they could send a note with the amount they paid or a personal message to the person they were covering.
“People don’t want to look cheap,” Jung said. “They want to be fair, but they also want to fit in with the social norms.”
The findings suggest consumers’ senses of fairness and reciprocity may be just as strong or stronger of a driving force in purchasing decisions than the desire to score the best deal.
“The results suggest that businesses that rely entirely on consumers’ social preferences can survive and even thrive,” Jung said. “It’s pretty amazing.”