Thursday, February 23, 2012

Panera tests pay what you want

Panera Bread is opening at least two more pay-what-you-want cafes as part of its effort to help feed the hungry in a dignified way.
Panera spokeswoman Kate Antonacci said Thursday that locations will be announced this spring. One cafe could open by summer, another in the fall and possibly a third later this year.The concept is simple: Panera lists a suggested price for food, but customers pay what they want.
Read it at The Huffington Post
Panera Bread To Open At Least Two More Pay-What-You-Want Cafes
by Jim Salter


Septeus7 said...

The Austrian schoolers won't know what to do if this succeeds because this directly violates their theories about how market competition is needed for economic calculation via a pricing system.

If the every customer sets their own price then we don't a have a competitive market by definition because this system has a single firm setting all prices to any price any other firm could create and therefore the natural market price can't be set.

Behavior economics on the other hand says that this has a good chance of working because humans naturally reciprocate and thus more people will be likely to pay and even over pay rather than underpay because they like the idea of "pay what you want" as an institution without regards to economic calculation.

If this business model works, the irony would be that communism beats capitalism because the free markets chose anti-competitive practices over competitive practices thus proving in a "free market" that capitalism destroys itself by competitively eliminating competitors.

Long live Panera! The Free Market Marxists.

Tom Hickey said...

Sepeus7, I have spent much of my life in the not for profit world and the gift economy and can testify that it works. The non-profit economy is huge globally, and there are alternative communities virtually everywhere, too, many practicing the gift economy within the community and among communities sharing resources. In local markets around the world the offer shifts depending on the perceived ability of the bidder to pay. Many Americans complain about being overcharged when they are simply subsidizing the less well-off. This is also reflected in fair trade.

The greatest economic mistake that humans make as far as I am concerned is thinking that quid pro quo exchange is the standard, when indirect reciprocity is a fundamental law of nature. Primitive peoples knew this intuitively. They used in the gift economy in their own communities (Graeber, Debt), establishing a network of mutual benefit and mutual reciprocity voluntarily. The countercultural revolution established this as the basis of holistic community and alternative economics. It is also the basis of open source.

Virtually all the sages have taught this key principle, and it is expressed in the Gospels in the Sermon of the Mount (based on a particular interpretation):

24 No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon [wealth, property].

25 Therefore I say to you, do not worry about your life, what you will eat or what you will drink; nor about your body, what you will put on. Is not life more than food and the body more than clothing? 26Look at the birds of the air, for they neither sow nor reap nor gather into barns; yet your heavenly Father feeds them. Are you not of more value than they?
  27Which of you by worrying can add one cubit to his stature? 
  28So why do you worry about clothing? Consider the lilies of the field, how they grow: they neither toil nor spin; 29and yet I say to you that even Solomon in all his glory was not arrayed like one of these. 30Now if God so clothes the grass of the field, which today is, and tomorrow is thrown into the oven, will He not much more clothe you, O you of little faith? 
  31Therefore do not worry, saying, "What shall we eat?' or "What shall we drink?' or "What shall we wear?' 32For after all these things the Gentiles seek. For your heavenly Father knows that you need all these things. 33But seek first the kingdom of God and His righteousness, and all these things shall be added to you. 34Therefore do not worry about tomorrow, for tomorrow will worry about its own things. Sufficient for the day is its own trouble.
Matt 6: 24-34