Pay as you go - Frey & Steiner → 2010 Flashcards
goals of pricing
equilibrium between supply / demand / price / quality
Pricing schemes examples
Free entry
museum club membership
voluntary donation at entry or exit
entry price
exit price fixed or variable
Price discrimination + Funktion
Categorization of possible consumers + different prices for different groups
Willingness as function to pay
To maximize attraction / revenue of each groups
Exit prices = “Art per Minute”
Charged according to time spent in a museum
Basis of subjective perception of how good the experience was + sense of fairness
Free entry advantages + disadvantages
Advantages
Museums as World Heritage sights
Considered social → draws new groups
Raises no. of visitors → increased cultural prestige
Manager firm exploiting donors and consumers is limited
Should be 0 to satisfy efficiency
Disadvantages
Overcrowdedness, diminished quality of visit
“No price no value”
Exit donation: effects of volutary contributions on satisfaction
Voluntary contributions → capture payments according to willingness and ability to pay, what they consider fair
More choice → increased satisfaction
Social arrangement
Inefficient no. of visitors, overusing of museum
More efficient, produces more financial resources for the museum
Entry charge
Maximise net utility for produced for society
Charge foreigners more
Admissions charges
Price elasticity for cultural demand low
Admission charge only for special services, use revenue to make museum more attractive
Quality important determinant of cultural demand
Can promote access
Neoclassic principle
Produces an efficient allocation of the scarce resources of museums
Price differentiation efficient when
Demand is low + low capacity → price close to 0
Guarantees individuals with highest willingness to pay enjoy the museum
Low price elasticity of demand charged higher prices
Special vs. normal exhibition
3 reasons why people reject price system
Lack of information
conflict over income distribution
pricing considered unfair
Exit price proposed by article
Art per minute
Consider fairness arguments
E.g. lower rate for unemployed visitors
Classical homo economicus
Optimiza intake of culture per minute to balance pro rate price of exit
Take into account customer satisfaction
Willing to spend more money
Greater involvement
Or refund if they spend less time at a museum after paying entry ticket
Voluntary contribution afterwards - cost/benefit consideration
Difficult/costly to make consumers pay?
Consumer feels link with or responsibility to producer?
group/peer pressure to pay?
Function as quality signal to others?
Do non-spending consumers spend enough time?
