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Willingness To Pay
In behavioral economics, willingness to pay (WTP) is the maximum price at or below which a consumer will definitely buy one unit of a product.Varian, Hal R. (1992), Microeconomic Analysis, Vol. 3. New York: W.W. Norton. This corresponds to the standard economic view 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. See also * Cost-benefit analysis * Welfare economics Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. Attempting to apply the principles of welfare economics gives rise to the field of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Behavioral Economics
Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals or institutions, such as how those decisions vary from those implied by classical economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. The study of behavioral economics includes how market decisions are made and the mechanisms that drive public opinion. The concepts used in behavioral economics today can be traced back to 18th-century economists, such as Adam Smith, who deliberated how the economic behavior of individuals could be influenced by their desires. The status of behavioral economics as a subfield of economics is a fairly recent development; the breakthroughs that laid the foundation for it were published through the last three decades of the 20th century. Beha ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price
A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the commercial exchange, the payment for this product will likely be called its "price". However, if the product is "service", there will be other possible names for this product's name. For example, the graph on the bottom will show some situations A good's price is influenced by production costs, supply of the desired item, and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions. Price can be quoted to currency, quantities of goods or vouchers. * In modern economies, prices are generally expressed in units of some form of currency. (More specifically, for raw materials they are expressed as currency per unit weight, e.g. euros per kilogram or Rands per KG.) * Although ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Consumer
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. The term most commonly refers to a person who purchases goods and services for personal use. Consumer rights “Consumers, by definition, include us all," said President John F. Kennedy, offering his definition to the United States Congress on March 15, 1962. This speech became the basis for the creation of World Consumer Rights Day, now celebrated on March 15. In his speech : John Fitzgerald Kennedy outlined the integral responsibility to consumers from their respective governments to help exercise consumers' rights, including: *The right to safety: To be protected against the marketing of goods that are hazardous to health or life. *The right to be informed: To be protected against fraudulent, deceitful, or grossly misleading informati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Product (business)
In marketing, a product is an object, or system, or service made available for consumer use as of the consumer demand; it is anything that can be offered to a market to satisfy the desire or need of a customer. In retailing, products are often referred to as '' merchandise'', and in manufacturing, products are bought as raw materials and then sold as finished goods. A service is also regarded as a type of product. In project management, products are the formal definition of the project deliverables that make up or contribute to delivering the objectives of the project. A related concept is that of a sub-product, a secondary but useful result of a production process. Dangerous products, particularly physical ones, that cause injuries to consumers or bystanders may be subject to product liability. Product classification A product can be classified as tangible or intangible. A tangible product is an actual physical object that can be perceived by touch such as a build ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Reservation Price
In economics, a reservation (or reserve) price is a limit on the price of a good or a service. On the demand side, it is the highest price that a buyer is willing to pay; on the supply side, it is the lowest price a seller is willing to accept for a good or service. Reservation prices are commonly used in auctions, but the concept is extended beyond. A party's best alternative to a negotiated agreement (BATNA) is closely related to their reservation price. Once a party determines their BATNA, they can then calculate their reservation price. In negotiations surrounding the price of a particular good or service, the reservation price is a singular number. However, this is not the only situation in which reservation prices are seen. When multiple issues are being discussed, such as the size of salary and amount of benefits when applying for a new job position, the reservation price would be represented as a package where multiple requirements need to be met. Description In ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost–benefit Analysis
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. A CBA may be used to compare completed or potential courses of action, and to estimate or evaluate the value against the cost of a decision, project, or policy. It is commonly used to evaluate business or policy decisions (particularly public policy), commercial transactions, and project investments. For example, the U.S. Securities and Exchange Commission must conduct cost-benefit analyses before instituting regulations or deregulations. CBA has two main applications: # To determine if an investment (or decision) is sound, ascertaining if – and by how much – its benefits outweigh its costs. # To provide a basis for comparing inve ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Welfare Economics
Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. Attempting to apply the principles of welfare economics gives rise to the field of public economics, the study of how government might intervene to improve social welfare. Welfare economics also provides the theoretical foundations for particular instruments of public economics, including cost–benefit analysis, while the combination of welfare economics and insights from behavioral economics has led to the creation of a new subfield, behavioral welfare economics. The field of welfare economics is associated with two fundamental theorems. The first states that given certain assumptions, competitive markets produce ( Pareto) efficient outcomes; it captures the logic of Adam Smith's invisible hand. The second states that given further restrictions, any Pareto efficient outcome can be supported as a competitive market equilibriu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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