A Pay-What-You-Want Experiment for the Freakonomics Movie
The producers and distributors of the Freakonomics film have set up a nice little experiment: a one-night sneak-preview screening (tonight) in several U.S. cities with a pay-what-you-want pricing scheme.
We have written about pay-what-you-want pricing on this blog many times. Many people connect it to the “Bagel Man” story we told in Freakonomics, but that was different: Paul Feldman had set prices but no cashier, so that was an honor-system payment scheme rather than pay-what-you want.
The movie experiment is truly pay-what-you-want, with a minimum of 1 cent (finally, something to do with those pennies!) and a maximum of $100. There was no choice for zero, nor an option for giving some of the money to charity. The choices were:
- From $.01 to $5.00 at $.50 intervals
- From $5.00 to $20.00 at $1.00 intervals
- From $20.00 to $80.00 at $5.00 intervals
- $90.00 and $100.00
To get tickets, people had to fill in a survey with nine questions, asking about age, gender, income, employment and the like. When the experiment is done, the producers will give us the data, and we’ll write up a summary. Let me prime the pump by asking you a few questions:
- Which amount do you think will be the most popular?
- Of the cities involved (Boston; Cambridge, Mass.; Chicago; Dallas; Denver; Los Angeles; New York; Philadelphia; San Francisco; and Washington, D.C.) which do you think will pay the most? The least?
- Which income bracket do you think will pay the most, and the least? (The choices were: less than $25k; $25k-$50k; $50k-$75k; $75k-$100k; and more than $100k.)
- The survey also asks people if they’ve read Freakonomics; will payment be higher among those for whom the answer is yes or no?
I’ve seen a bit of the early data and I’ll share one fact with you: out of nearly 5,000 people who “bought” tickets, guess how many paid $100, the top price?
My question: Why?!!
I am guessing most of the $100 payees thought they would be the only person to do so, and would therefore show up in the data set as the sole high-roller. Sorry, folks.
It does remind me of something that happened in college. I had a brand-new girlfriend, Sandy, and we were planning to go to the movies one night, along with a friend of hers. Sandy told me that if you showed up at the movie theater in town (this was Boone, N.C., with only one theater) with a $100 bill, they’d let you in free because they never had enough cash on hand to make change.
How could you not be attracted to such a clever girl?
So I went to the bank, drained my account and walked out with a crisp $100 bill. That night at the movie theater, the cashier took my $100 bill without a second glance, gave me three tickets and gave me back the change. Sandy smiled. I did too. She wasn’t clever in exactly the way I thought, but she was clever nonetheless.