Had a good talk with Jansen. I thought it might be interesting, it contains some further ideas to further refine the pay-what-you-want pricing model.
It's a chat log, so pardon the format. I have edited it somewhat, to reduce clutter and skip over stuff that doesn't matter. I've added some [editorial notes] as well.
me: The point isn't to keep people from being asses, or to put them in a bad spot. It's to make sure that people realize the value that they're actually getting.
Jansen: however, i think they're going about raising the avg the wrong way
the way they have it, they've set a bar for amt to get extra stuff
everyone's just going to pay $7.40, which will do almost nothing to raise the avg. prolly should have been $10. b/c, with that bar in place, fewer ppl will pay between avg and $10
me: You have to pay more than whatever the average currently is, as I understand it. That's an excellent way to bring up the average.
Jansen: Help us bring up the average! Everyone who pays more than $7.38 gets the first Humble Bundle as well!
me: Refresh in ten minutes. It'll be a different number. The "bar" is moving, and is based on the average.
Jansen: which is the problem. it limits the $8 to $10 range donors, they will prolly do $7.40 instead
me: I agree that the idea needs polish.
me: However, the fundamental idea is brilliant. "Bring up the average, get more stuff". Most people are strongly influenced by the average price. It's a big win!
me: Hopefully keeps the downward spiral these things tend to suffer from from happening.
Jansen: i haven't really noticed a downward spiral. the avg's increased since i bought mine. i'm not saying it doesn't exist though, it's just not happened in the past week or so
me: At some point, it settles into a saddle point. Something with as high a buy rate as the HIB2 settles very quickly.
Jansen: but, if everyone has the incentive to go above avg, then the avg will be higher
me: Exactly! [The saddle will be at a higher price.]
Jansen: however, the avg can easily go above ppl's price range
me: That's fine, it's pay what you want.
Jansen: it's penalizing ppl who are less wealthy, rather than less generous. there's little difference between $5 and $10 (unless you're lacking in any income at all). but if the avg were, say, $40 (just spouting a figure)
me: It's true that that might theoretically be able to happen, but the chances seem extremely remote. It's far easier to bring the price down than bring it up.
Plus, if you can only afford $5-10, it's still pay-what-you-want, so you can still afford it.
me: Although you'll feel like a dick. And you won't get the extra.
Jansen: this is true. so, the answer is this: the extra needs to be less than the main bundle. bundle of five games, one or two games for above avg payees
me: Well, I think that's probably true, but it hasn't been tested. It may be that there's actually a sweet spot where the bonus is better than the default. Then you essentially have a "climbing bid" situation.
[Technically, the extra could be anything at all, including things like swag or even just a web-comic-like "voting incentive" image. Having a bonus worth more than the baseline would probably be bad, but it hasn't been tried, as far as I know.]
me: That WOULD penalize the poor. [To have a better bonus than baseline.]
Jansen: it's truly a penalty for ppl who cannot pay above avg in good conscience to their finances
me: Yes, I agree. However, I'm not sure, from a business standpoint, which is better. Poor people can't buy some things, and that's just the way it is.
Jansen: i assume the HIB ppl don't directly want to screw with poor ppl lol
me: It may be ten or twenty times more profitable to accept that.
Jansen: that's true
me: If you're getting along on a shoestring budget yourself, you might need that extra cash to keep making games. Or music.
me: Also, there's the HIB option more directly: The awesome bonus this time is the standard next time. So if you don't buy it now, you can pay what you want in a few months. [This better-bonus stuff has screwed up the language a bit, but the basic idea is sound.]
me: Here's another interesting thing you may not have noticed, just so it's in the chat log: Did you look at the highest payments? The top ten list?
Jansen: they're by ppl who think along your same lines about the avg (most notably Notch of Minecraft) and are deliberately trying to raise it
Jansen: i noticed that when i saw Notch up there. no?
me: Look again... They're mostly ads. That's an... interesting kind of ad space... So that's just one more way to bring up the average, if you implement it.
Jansen: it is. one of the ads is by a company that's involved in the bundle
Jansen: ppl paying more than avg to get kool stuff and increase the avg == good
Jansen: ppl noticing the avg is low and deliberately trying to raise it == good
Jansen: companies artificially increasing the avg to buy available ad space == BAD
Jansen: it only happened thrice this time, so that's fine
me: I'm sure it happened lots, and they just fell off the bottom.
Jansen: but, if you're suggesting utilizing that on a larger scale.... i'd not think that was a good idea
me: Why is it worse than normal advertising?
Jansen: b/c it directly costs the user money, kinda
me: It raises the average at least a little, which in turn probably causes the buyers to spend a little more. But let's reframe it just a bit.
me: Have you ever seen a pay-what-you-want that seemed too high? Ever?
Jansen: that's true. so, assuming the avg is too low, it's alright
me: With the understanding that it's not quite as pure-summer-breeze as giving out extra stuff for raising the average, it seems a valuable tool.
Jansen: assuming it's implemented in a way that causes the avg to skyrocket, it's bad. it all depends on implementation
me: Hah! Wait, let's think about that. If the advertisers actually cause the product's average to skyrocket out of control, then they are your primary target audience.
me: Once you've reaped your money from them, give the product away for cheap later.
Jansen: which defeats the purpose of a "humble indie bundle"
me: Yes, it certainly wouldn't fit for them. [And it seems unlikely to ever happen, a note that was removed when clipping the chat.]
Jansen: [first-day sales pitch is] "top ten commercial contributors get the ad spot!" so, it's a competition. it raises the avg to, say, $50 (given the commercial contributors and other buyers eager to get in on it)
me: Well, if you really want to get a bidding war for ad space going, then you allow them to add to their payment later. Classically, this kind of bidding technique can get people to pay $4+ for a $1 bill.
Jansen: yes, that' fine. but commercial bids end first day of sale
me: Hm. Why?
Jansen: so the avg steadily decreases after first day of sale. you get the commercial revenue, and then the price tapers down with time
me: I'm not sure I follow your no-commercial-bidding-after-day-one argument, but I do like the idea overall.
[Clipped tangent about wagering on price decreases]
Jansen: that way, the price will eventually get to a lower level
me: I think that will always happen, though.
Jansen: and so ppl who can't pay more are just losing time.
me: The wait-and-pay-less idea is valuable, but mostly if either the wait is longer than a month or if the thing you're buying is extremely time sensitive.
me: Anything sold today will be free tomorrow in this kind of world, so I'm not sure it makes sense to overcomplicate the sales.