Definition of name-your-own-price
This is an innovative pricing concept where customers have the possibility of paying any price they wish, even nothing, for a certain product or service. It has been shown that only a limited number of customers pay nothing, as this would be considered unfair.
Originally, the first name-your-own-price auctions took place on the web. On priceline.com consumers were able to place bids for a product, e.g., hotel room. When the customer's bid for a room exceeded the undisclosed price on priceline.com, the transaction could be completed. Priceline.com earned the difference between the price the customer named and the price charged by the hotel.
Apart from this, web auctions and name-your-own-price systems are also offered by some restaurants. So a person who has lunch in a restaurant has the possibility of deciding how much s/he is willing to pay for the meal consumed. A restaurant in London reported it has observed rising revenues due to this concept, as customers usually paid more than they would have been charged.