science

Pay what you can

Pay what you can is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Pay what you can rather than just read about it. In short: Pay what you can (PWYC) is a non-profit or for-profit business model which does not depend on set prices for its goods, but instead asks customers to pay what they feel the product or service is worth to them. It is often used as a promotional tactic, but can also be the regular method of doing business.

Key takeaways

Pay what you can belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Pay what you can to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Pay what you can from memory before moving on to harder problems.

Reference excerpt

Pay what you can (PWYC) is a non-profit or for-profit business model which does not depend on set prices for its goods, but instead asks customers to pay what they feel the product or service is worth to them. It is often used as a promotional tactic, but can also be the regular method of doing business. It is a variation on the gift economy and cross-subsidization, in that it depends on reciprocity and trust to succeed. "Pay what you want" is sometimes used synonymously, but "pay what you can" is often more oriented to charity or socially oriented uses, based more on ability to pay, while "pay what you want" is often more broadly oriented to perceived value in combination with willingness and ability to pay.

Motivation Giving buyers the ability and freedom to decide what they are willing to pay for can be very successful, this eliminates the issues of conservative pricing. Buyers are attracted to the fact they are not obligated to pay a certain price for a product, this eliminates all issues of an item becoming overpriced in the consumer's eyes, the customer can then make their own judgment on what the product is actually worth.

Advantages Entices members of the public to engage with the business or organization (potential future customers). Attracts a large number of potential customers from friends and families of current customers (word of mouth). Great way of free market research and immediate feedback for the business or organization. For example, if a private bookshop was selling its own published books and the customer valued it at £10 ($15) rather than say £4 ($6.15) and was willing to pay that, this would display positive feedback for the company. The organisation could then use this information for personal statistics and data. No barriers to entry, allowing customers to try the product or service for nothing. Differentiates the business from other competitors - a unique selling point.

Examples A Place at the Table American Museum of Natural History Grace Ndiritu - COVERSLUT© fashion project FC United of Manchester's Season Ticket policy Freeware Applications Humble Bundle In Rainbows – An album by Radiohead Lentil as Anything One World Cafe Panera Cares community cafés Paste Magazine Pink Peacock café SAME Cafe A Little Cabin in the Alps

See also Pay what you want Price discrimination Sliding scale fees

References

External links Time (magazine) https://www.theguardian.com/stage/theatreblog/2011/aug/17/pay-what-you-can-theatre https://www.arcolatheatre.com/visit/tickets-and-discounts https://www.bbc.co.uk/news/uk-england-33609867 bbc.co.uk http://www.agilepwyc.org/ http://www.infoq.com/news/2010/08/agile-training-gift

Worked examples

Example 1 — a first encounter with Pay what you can

Start with the simplest possible case. Write down what Pay what you can claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Pay what you can before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Pay what you can ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Pay what you can

In research: Pay what you can appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Pay what you can in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Pay what you can is common in secondary-school and first-year university syllabi. It links to neighbouring topics Business models, so understanding it makes those chapters shorter.
In everyday life: Look for Pay what you can outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Pay what you can in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Pay what you can means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Pay what you can out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Pay what you can in simple terms?

Why does Pay what you can matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Pay what you can?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Pay what you can.