Authors: V. Shpyrko, PhD in Economics, Associate Professor, ORCID ІD 0000-0003-4955-2685,
I. Iarmolenko, PhD student, ORCID ІD 0000-0002-4764-6146, Taras Shevchenko National University of Kyiv, Kyiv, Ukraine

Abstarct: This article presents a method for conducting a marketing research aiming to evaluate statistics of a “Willingness-to-Pay” random variable distribution. Similarly, this approach can be used for evaluating minimal price a customer is ready to sell a good for. Since a general survey tends to bring bias into WTP evaluation, we suggest reducing psychological pressure while asking a single question “Would you buy this product for X amount of money?”. It was empirically shown that this information is enough to conduct an experiment and evaluate the characteristics of a population distribution. The algorithm is easy to use, however needs an expert control for gaining higher accuracy. Using tools of simulation modeling we assessed the level of bias of an experimentally obtained distribution statistics compared to a real population statistics. The algorithm helps predicting individual demand and total income level depending on a product pricing level.

Key words: pricing strategy, willingness to pay, marketing research, marginal price.

Received: 06/11/19

1st Revision: 22/11/19

Accepted: 15/12/19



Gmurman, V., 1977. Probability Theory and Mathematical Statistics. Мoscow: Higher School.

Chornous, G, Iarmolenko, I., 2019. The Relationship Between Pricing Types in Information Economy. In V. Ponomarenko, ed. 2019. Systems Modeling Tools in Information Economy / Kharkiv: HSEM. pp. 120–135.

Almanzar, M., Ulimwengu, J., 2019. Willingness to Pay for Improved Electricity Services in Senegal: Households and Businesses Estimates Using  Contingent Valuation Surveys with Multiple Bids. [pdf] International Food Policy Research Institute. Available at:

Becker, G. M., DeGroot, M. H., and Marschak, J., 1964. Measuring Utility by a Single-Response Sequential Method. Behavioral Science, 9(3), pp. 226–232.

Borzykowskia, B., Baranzinia, A., and Maradana, D., 2017. Scope Effects in Contingent Valuation: Does the Assumed Statistical Distribution of WTP Matter? Ecological Economics, 144, pp. 319–329.

Breidert, C., Hahsler, M., and Reutterer, T., 2006. A review of Methods for Measuring Willingness-to-Pay. Innovative Marketing, 2(4), pp. 8–32. [online] Available at: [Accessed 1 Feb 2020].

Greene, D., Hossain, A., Hofmann, J., Helfand, G., and Beach, R., 2018. Consumer Willingness to Pay for Vehicle Characteristics: What Do We Know? Transportation Research Part A: Policy and Practice, 118 (Dec), pp. 258-279. 10.1016/j.tra.2018.09.013.

Harstad, R. M., 2000. Dominant Strategy Adoption and Bidders’ Experience with Pricing Rules. Experimental Economics, 3(3), pp. 261–280.

Impact Utilities, 2018. Willingness-to-Pay Research to Support PR19. [pdf] Impact Utilities. Available at: https://www.south-staffs-

Johnson, R. M. 1974. Trade-off Analysis of Consumer Values. Journal of Marketing Research, 11(May), pp.121–127.

Kaas, K. P. and Heidrun, R., 2006. Are the Vickrey Auction and the BDM-Mechanism Really Incentive Compatible? Empirical Results and Optimal Bidding Strategies in the Case of Uncertain Willingness-to-Pay. Schmalenbach Business Review, 55(1), pp. 37–55.

Kagel, J. H., Ronald, M. H., and Dan L., 1987. Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study. Econometrica, 55(6), pp. 1275–1304.

Kucher, A., Heldak, M., Kucher, L., and Raszka, B., 2019. Factors Forming the Consumers’ Willingness to Pay a Price Premium for Ecological Goods in Ukraine. International Journal of Environmental Research and Public Health, 16(5), pp. 1–14.

Kullback, S., Leibler, R. A., 1951. On information and sufficiency. Annals of Mathematical Statistics, 22(1), pp. 79–86.

Lam, T., and Ossolinski, C., 2015. The Value of Payment Instruments: Estimating Willingness to Pay and Consumer Surplus. [pdf] Reserve Bank of Australia. Available at:

Miller, M. K., Hofstetter, R., Krohmer, H., Zhang, Z. J., 2011. How Should Consumers’ Willingness to Pay Be Measured? An Empirical Comparison of State-of-The-Art Approaches. Journal of Marketing Research, 48(1), pp.  172-184. jmkr.48.1.172.

Mitchell, R. C., and Carson, R. T., 1989. Using Surveys to Value Public Goods: The Contingent Valuation Method. Washington: Resources for the Future.

Nagle, T. T., and Holden, R. K., 2002. The Strategy and Tactics of Pricing. Upper Saddle River, NJ: Prentice Hall.

Nessim, H., and Dodge, R., 1995. Pricing: Policies and Procedures. New York: New York University Press.

Sardar, A., Rizwanyaseen., M., Abbas, A., Waqas, M., and Gill, B., 2018. Willingness to Pay for Vaccination Against Hepatitis B and Its Determinants: The Case Study of an Industrial District of Pakistan. Italian Journal of Public Health, 15(4), pp. 1–6.

Van Westendorp, P., 1976. NSS-Price Sensitivity Meter (PSM) – A New Approach to Study Consumer Perception of Price /

Van Westendorp. Proceedings of the 29th ESOMAR Congress, Venice, 5–9 September 1976, pp. 139–167.

Völkner, F., 2006. An Empirical Comparison of Methods for Measuring Consumers’ Willingness to Pay. Marketing Letters, 17(2), pp. 137–149.

Wang, T., Venkatesh, R., and Chatterjee, R., 2007. Reservation Price as a Range: An Incentive-Compatible Measurement Approach. Journal of Marketing Research, 44(May), pp. 200–213.

Wertenbroch, K., and Skiera, B., 2002. Measuring Consumer Willingness to Pay at the Point of Purchase. Journal of Marketing Research, 38 (2), pp. 228–241.

Xiong, K., Kong, F., Zhang, N., Lei, N., and Sun, C., 2018. Analysis of the Factors Influencing Willingness to Pay and Payout Level for Ecological Environment Improvement of the Ganjiang River Basin. Sustainability, 10(7), pp. 1–17.