Getting the price right is essential for successful new product introductions. An accurate estimate of consumers’
willingness to pay is a crucial part of this task. Measurement of willingness to pay for innovations, however, often yields
biased results. In this paper, we investigate consumer-related characteristics and motives that might underlie this bias.
Drawing on the elaboration likelihood model, we develop a conceptual model to identify consumer characteristics
relevant for preference measurement for innovative products. In doing so, two main factors that potentially influence
hypothetical bias are distinguished: ability and motivation. Our conceptual discussion and empirical results demonstrate
that the validity of willingness to pay statements is higher among consumers who show a high ability to assess
the new product’s utility and who are truly interested in purchasing the new product. Counter to intuition, willingness
to pay statements from innovators, consumers with good product category knowledge, or consumers who perceive the
new product to be highly innovative are relatively more biased and should be interpreted with caution.
This research is among the first to look at consumer characteristics rather than methodological issues when it comes
to measuring consumer willingness to pay for innovative products. Our conceptual discussion and empirical examination
of the drivers of hypothetical bias can be used to refine the validity of the results of the direct willingness to pay
approach. These findings should help improve new product pricing surveys and open new avenues for research in
measuring consumer preferences.
Getting the price right is essential for successful new product introductions. An accurate estimate of consumers’
willingness to pay is a crucial part of this task. Measurement of willingness to pay for innovations, however, often yields
biased results. In this paper, we investigate consumer-related characteristics and motives that might underlie this bias.
Drawing on the elaboration likelihood model, we develop a conceptual model to identify consumer characteristics
relevant for preference measurement for innovative products. In doing so, two main factors that potentially influence
hypothetical bias are distinguished: ability and motivation. Our conceptual discussion and empirical results demonstrate
that the validity of willingness to pay statements is higher among consumers who show a high ability to assess
the new product’s utility and who are truly interested in purchasing the new product. Counter to intuition, willingness
to pay statements from innovators, consumers with good product category knowledge, or consumers who perceive the
new product to be highly innovative are relatively more biased and should be interpreted with caution.
This research is among the first to look at consumer characteristics rather than methodological issues when it comes
to measuring consumer willingness to pay for innovative products. Our conceptual discussion and empirical examination
of the drivers of hypothetical bias can be used to refine the validity of the results of the direct willingness to pay
approach. These findings should help improve new product pricing surveys and open new avenues for research in
measuring consumer preferences.
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