Source: NY Magazine
It seems a new trend is emerging in business where companies are allowing consumers to pick their own prices for products. The first I had heard of this was with the release of Radiohead's In Rainbows album. Radiohead allowed their fans to purchase the album for whatever price they thought worthy on their website. It is estimated that the band profited ten million dollars in just the first week despite customers paying only half of what they would normally for a cd. Other business sectors are starting to use this ploy as well. Although I don't believe all businesses are using this to increase profit, some are testing to see whether they profit more from giving customers increased purchasing power. Certain restaurants across the country are allowing customers to place monetary value on their meals. Johnny Reb's Southern Roadhouse in Los Angeles, CA is trying this technique with diner food. A customer orders whatever they wish and is presented with the value of what the meal is worth before they decide what to actually pay. I think this is an interesting concept and may be more profitable, especially for restaurants who target more affluent customers.
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