Pricing Corporate Services: How Qualitative and Quantitative Information Affects Willingness to Pay

Abstract

In this study I explore how different ways of presenting information affect a person’s Willingness to Pay (WTP). Building off prior research conducted by McGraw et al. (2010), this study introduces both a new way to test information presentation, and the concept of a “Compatibility Continuum” to develop a more nuanced understanding of how compatibility can impact decision making. I propose that the extent to which a piece of information is incompatible with its likelihood and response format can be linked to an incrementally equivalent set of psychological disruption through increased mental transformation. General support for my hypothesis is found, and implications and future directions are discussed. Keywords: Compatibility, Willingness to Pay (WTP), Monetary Gambles, Preference Reversals, Choice, Value, Decision Making