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An empirical investigation of consumers’ willingness-to-pay and the demand function: The cumulative effect of individual differences in anchored willingness-to-pay responses

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  • Cenk Koçaş
  • Kivilcim Dogerlioglu-Demir

Abstract

Extant literature on anchoring demonstrates that priming affects willingness-to-pay (WTP), but it mainly focuses on average WTP values, neglecting the aggregate effects of priming on WTP distributions. In this research, we argue that when priming is in effect, WTP distribution rather than the average should be analyzed because important pricing decisions, such as optimal price determination or price customization, require an assessment of distributions. Therefore, the objective of this research is to uncover how priming affects WTP distributions and, consequently, the demand curve. The results of these two studies suggest that priming affects not only the average but also the whole distribution and that this effect is in the form of a shift/stretch to the right for high-priming manipulations and to the left for low-priming manipulations. Copyright Springer Science+Business Media New York 2014

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  • Cenk Koçaş & Kivilcim Dogerlioglu-Demir, 2014. "An empirical investigation of consumers’ willingness-to-pay and the demand function: The cumulative effect of individual differences in anchored willingness-to-pay responses," Marketing Letters, Springer, vol. 25(2), pages 139-152, June.
    • Handle: RePEc:kap:mktlet:v:25:y:2014:i:2:p:139-152
    DOI: 10.1007/s11002-013-9235-4
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    References listed on IDEAS

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    1. Li, Lunzheng & Maniadis, Zacharias & Sedikides, Constantine, 2021. "Anchoring in Economics: A Meta-Analysis of Studies on Willingness-To-Pay and Willingness-To-Accept," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    2. Tomczyk, Arkadiusz T. & Buhalis, Dimitrios & Fan, Daisy X.F. & Williams, Nigel L., 2022. "Price-personalization: Customer typology based on hospitality business," Journal of Business Research, Elsevier, vol. 147(C), pages 462-476.
    3. Magdalena Brzozowicz & Michał Krawczyk, 2020. "Honey, Mugs and Caricatures: anchors on prices of consumer goods only hold hypothetically," Working Papers 2020-40, Faculty of Economic Sciences, University of Warsaw.
    4. Magdalena Brzozowicz & Michał Krawczyk, 2022. "Anchors on prices of consumer goods only hold when decisions are hypothetical," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-23, January.

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