PWYW as a participative pricing mechanism in online service

As a new participative pricing mechanism, pay what you want (PWYW) has some innovative characteristics making it can be served as a promotional tool to attract customers, as well as a profitable pricing mechanism, though it gives the entire price control to customers. Because of many unique characteristics, it is difficult for online service providers to determine the price of their services. In this paper, we insist that PWYW can be applied to online services. Firstly, we analyses the classification of participative pricing mechanism, and the profitability of pay what you want pricing strategy. We then discuss why PWYW can be applied to online services and how to maximize this pricing strategy.