Research Highlights

From Bribes to Bequests and Gifts to Gratuities: How Consumers Choose to Pay

Overview: In the paper, “From Bribes to Bequests and Gifts to Gratuities: The Black, White, and Shades of Gray of How and Why Consumers Pay What They Want,” NYU Stern Professor Priya Raghubir and Shirley Bluvstein (Yeshiva University) develop a framework integrating nearly a dozen forms of voluntary payments to examine if those payments are actually less “voluntary” and instead are more similar to bribes. The authors define voluntary payments as those where the customer decides whether or not to make the payment and, if they decide to make a payment, then decide who to pay, how much to pay, when, and in what form of payment.

Why study this now: The researchers talk about different ways people choose to pay for things, like giving gifts, leaving money in their wills, or even bribes. People make these payments for different reasons, for example because it makes sense economically, or it feels right emotionally. The research suggests there are consequences from making these payments that affect how people feel. The authors suggest that these payments aren't always as voluntary as they seem, and they can be influenced by social expectations or norms.

What the authors found: The paper suggests that when there's an expectation of future payback, even legal payment types may resemble bribes. Various voluntary payments, such as suggested fees, pay-what-you-wish, tips, and charitable gifts, may involve implicit expectations. Additionally, the authors find that the way people think about these payments forms a cycle, where expectations influence how we pay, and the results of the payments influence what we expect in the future. Finally, the paper highlights potential policy implications, such as using insights from well-researched areas like tipping and charitable donations to inform open questions in less-explored areas like lobbying, dowry demands, and corporate gift giving.

Key insight: “We provocatively suggest that these payment types might be susceptible to becoming entrenched through self-reinforcing norms because the voluntary payments are not necessarily voluntary and to an extent akin to bribes,” say the researchers. “Specifically, it provides an overarching framework to showcase the similarities and differences between bribes, lobbying efforts, suggested fees, pay what you want, tips, bequests, legacies, charity, crowdsourcing, dowry, and gifts, identifying gaps in domains that are under-researched.”

This research paper has been published in Consumer Psychology Review.