Preference Reversals in Willingness-to-Pay and Choice
48 Pages Posted: 27 Apr 2017 Last revised: 16 Apr 2018
Date Written: March 28, 2018
A fundamental contribution of consumer behavior research is to help marketing scholars develop an understanding of how people think about and express their preferences. In this report we find that two commonly used preference elicitation procedures, willingness-to-pay and choices, are consistently associated with different expressed preferences. Specifically, choices are associated with a relatively greater preference for hedonic goods while WTP is associated with a relatively greater preference for utilitarian goods. We find that this is caused, in part, by the greater reliance on deliberation in determining WTP values, while preferences in choices are determined by an affect heuristic. Unlike other choices and WTP preference reversals, we find that this effect is not caused by mechanical determinants such as scale compatibility, as the effect persists with continuous scale measures that rely on affect and choice-based scale measures that rely on determining valuation.
Keywords: choices, willingness-to-pay, preferences, judgment and decision-making, affect, deliberation
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