Willingness to pay

In behavioral economics, willingness to pay WTP is a maximum price at or below which the consumer will definitely buy one segment of a product. This corresponds to the indications economic conception of a consumer reservation price. Some researchers, however, conceptualize WTP as a range.

According to the constructive preference view, consumer willingness to pay is a context-sensitive construct; that is, a consumer's WTP for a product depends on the concrete decision context. For example, consumers tend to be willing to pay more for a soft drink in a luxury hotel resort in comparison to a beach bar or a local retail store.