Consumer Price Evaluations Through Choice Experiments Articles uri icon

authors

  • SANDOR, ZSOLT
  • FRANSES, PHILIP HANS

publication date

  • May 2009

start page

  • 517

end page

  • 535

issue

  • 3

volume

  • 24

International Standard Serial Number (ISSN)

  • 0883-7252

Electronic International Standard Serial Number (EISSN)

  • 1099-1255

abstract

  • We collect experimental choice data and estimate preferences for mobile phones with a special focus on measuring consumer price evaluations when consumers face difficult choice tasks. For this purpose we employ a heteroskedastic random coefficient logit model in which the variance of the extreme value error term depends on variables that affect the consistency (with rational behavior) of choice. We specify the price of some products in the choice experiment with discount and seek to answer the question how consumers evaluate these. We find evidence in our data that the prices specified with discount significantly compromise the consistency of choice.