Eliciting and estimating reservation price: A semi-compensatory approach
This study proposes a two-stage method to elicit consumers' price acceptability range. The method combines a conjunctive stage to elicit price acceptability limits with a utility-based stage to choose a preferred product variation. The method is efficient in choice situations entailing many multi-attribute product variations under partial information conditions. A semi-compensatory model complements the method by jointly representing the conjunctive stage with multiple ordered-response models and the choice stage with a multinomial logit model. A case study of ceiling reservation price (CRP) elicitation for students' rental apartment choice shows (i) CRP distribution for different product variations, (ii) model estimation unraveling CRP determinants, and (iii) linkage between CRP and transaction price.
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- Rao, Akshay R & Sieben, Wanda A, 1992. " The Effect of Prior Knowledge on Price Acceptability and the Type of Information Examined," Journal of Consumer Research, Oxford University Press, vol. 19(2), pages 256-270, September.
- Kamel Jedidi & Sharan Jagpal & Puneet Manchanda, 2003. "Measuring Heterogeneous Reservation Prices for Product Bundles," Marketing Science, INFORMS, vol. 22(1), pages 107-130, July.
- Janiszewski, Chris & Lichtenstein, Donald R, 1999. " A Range Theory Account of Price Perception," Journal of Consumer Research, Oxford University Press, vol. 25(4), pages 353-368, March.
- Ofir, Chezy, 2004. " Reexamining Latitude of Price Acceptability and Price Thresholds: Predicting Basic Consumer Reaction to Price," Journal of Consumer Research, Oxford University Press, vol. 30(4), pages 612-621, March.
- Kamel Jedidi & Z. John Zhang, 2002. "Augmenting Conjoint Analysis to Estimate Consumer Reservation Price," Management Science, INFORMS, vol. 48(10), pages 1350-1368, October.
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