In behavioral economics, willingness to pay (WTP) is the maximum

price A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in t ...

at or below which a

consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

will definitely buy one unit of a product.Varian, Hal R. (1992), Microeconomic Analysis, Vol. 3. New York: W.W. Norton. This corresponds to the standard economic view of a consumer reservation price. Some researchers, however, conceptualize WTP as a range. According to the constructive preference view, consumer willingness to pay is a context-sensitive construct; that is, a consumer's WTP for a product depends on the concrete decision context. For example, consumers tend to be willing to pay more for a soft drink in a luxury hotel resort in comparison to a beach bar or a local retail store.

References

*Anderson, James C., Dipak Jain, and Pradeep K. Chintagunta (1993), "Understanding Customer Value in Business Markets: Methods of Customer Value Assessment," Journal of Business-to-Business Marketing, 1 (1), 3–30. *Breidert Christoph, Hahsler, Michael, and Reutterer (2006), "A Review of Methods for Measuring Willingness-to-Pay", Innovative Marketing, 2(4), 8–3

*Miller, Klaus M., Hofstetter, Reto, Krohmer, Harley, Zhang, John Z. (2011), "How Should Consumers' Willingness to Pay be Measured? An Empirical Comparison of State-of-the-Art Approaches", Journal of Marketing Resear

*Wertenbroch, Klaus and Bernd Skiera (2002), "Measuring Consumers' Willingness to Pay at the Point of Purchase," Journal of Marketing Research, 39 (May), 228–

{{DEFAULTSORT:Willingness To Pay Pricing

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