IDEAS home Printed from
   My bibliography  Save this paper

Anchoring Effects on Consumers' Willingness-to-Pay and Willingness-to-Accept


  • Simonson, Itamar

    (Stanford U)

  • Drolet, Aimee L.

    (U of California, Los Angeles)


When purchasing products, consumers often need to decide on the highest price they are willing to pay (WTP) and, when selling products, on the lowest price they are willing to accept (WTA). In this research, we contrast the determinants of WTP and WTA judgments and investigate their susceptibility to influence by arbitrary anchors that are unrelated to the product value. Consistent with our analysis, we demonstrate in a series of studies that purchase, but not selling, prices are influenced by arbitrary anchors (e.g., the last two digits of the person's social security number), even when such anchors are rejected as possible purchase/selling prices. Conversely, selling, but not purchase, prices are influenced by arbitrary anchors relating to the perceived market price of the product. The results also indicate that selling prices become sensitive to arbitrary anchors that are considered as possible prices, if the uncertainty about the value of the product to the consumer is made salient. We discuss the implications of these findings with respect to our understanding of the determinants of consumers' willingness-to-pay and willingness-to-accept, value-based pricing, and the anchoring effect.

Suggested Citation

  • Simonson, Itamar & Drolet, Aimee L., 2003. "Anchoring Effects on Consumers' Willingness-to-Pay and Willingness-to-Accept," Research Papers 1787, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:1787

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998. "Referendum contingent valuation, anchoring, and willingness to pay for public goods," Resource and Energy Economics, Elsevier, vol. 20(2), pages 85-116, June.
    2. Bettman, James R & Kakkar, Pradeep, 1977. " Effects of Information Presentation Format on Consumer Information Acquisition Strategies," Journal of Consumer Research, Oxford University Press, vol. 3(4), pages 233-240, March.
    3. Dhar, Ravi & Nowlis, Stephen M, 1999. " The Effect of Time Pressure on Consumer Choice Deferral," Journal of Consumer Research, Oxford University Press, vol. 25(4), pages 369-384, March.
    4. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-1348, December.
    5. Lichtenstein, Donald R & Bearden, William O, 1989. " Contextual Influences on Perceptions of Merchant-Supplied Reference Prices," Journal of Consumer Research, Oxford University Press, vol. 16(1), pages 55-66, June.
    6. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    7. Bettman, James R & Luce, Mary Frances & Payne, John W, 1998. " Constructive Consumer Choice Processes," Journal of Consumer Research, Oxford University Press, vol. 25(3), pages 187-217, December.
    8. Friestad, Marian & Wright, Peter, 1994. " The Persuasion Knowledge Model: How People Cope with Persuasion Attempts," Journal of Consumer Research, Oxford University Press, vol. 21(1), pages 1-31, June.
    9. Urbany, Joel E & Bearden, William O & Weilbaker, Dan C, 1988. " The Effect of Plausible and Exaggerated Reference Prices on Consumer Perceptions and Price Search," Journal of Consumer Research, Oxford University Press, vol. 15(1), pages 95-110, June.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:stabus:1787. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.