Definition, Measurement and Determinants of the Consumer's Willingness to Pay: A Critical Synthesis and Avenues for Further Research

Abstract

Differentiated prices, bundling, web auctions: firms' pricing practices are evolving. When there is no market, or for customized pricing, the willingness-to-pay concept seems to be interesting. This article aims at presenting a synthesis of the marketing research stream relative to willingness to pay. First, a definition of the concept is given and compared to other similar concepts, notably reference price and acceptable price. The methods of measurement are then presented, compared to those used to measure elasticity and examined. Next, the research on external determinants of willingness to pay is outlined. Finally, numerous avenues for further research are proposed.