Eliciting and estimating reservation price: A semi-compensatory approach

Sigal Kaplan*, Shlomo Bekhor, Yoram Shiftan

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

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.

Original languageEnglish
Pages (from-to)45-50
Number of pages6
JournalJournal of Business Research
Volume64
Issue number1
DOIs
StatePublished - Jan 2011
Externally publishedYes

Keywords

  • Ceiling reservation price
  • Direct elicitation methods
  • Price acceptability range
  • Two-stage model

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