Reservation Price as a Range: An Incentive-Compatible Measurement Approach

Drawing from the literature on buyers' uncertainty in preference and product knowledge, the authors suggest and empirically test the proposition that a consumer's reservation price for a product is more meaningfully and accurately represented as a range than as a single point. Given this conceptualization, they propose an approach for incentive-compatible elicitation of a consumer's reservation price range (ICERANGE) that builds on Becker,...