Reducing the Hypothetical Bias in Measuring Willingness to Pay for Mobile Communication Products

Abstract

Willingness to pay (WTP) measurements often contain a hypothetical bias (HB) when participants’ responses result from ‘fictitious’ survey scenarios rather than actual purchasing behavior or field studies. This discrepancy usually leads to inaccurate WTP values, which affect pricing strategies. Our quantitative online survey with German consumers (N = 215) examines the HB of WTP for different mobile phone plans as an example of a widespread consumer good. The aim is to focus on the correlation between hypothetical and actual WTP and the influence of socio-demographic factors on the HB. We used the Certainty Approach to correct hypothetical WTP data to reflect actual payment behavior. The findings show that hypothetical WTP values are generally higher than current expenditure, which demonstrates that HB significantly affects WTP measurements in the context of mobile communications products. The applied Certainty Approach successfully reduced this discrepancy. We found a moderate negative correlation between actual WTP and the extent of the HB, indicating that higher actual WTP is associated with lower bias. Moreover, socio-demographic factors such as age and income do not significantly influence the HB. This study suggests pricing strategies should consider HB-adjusted WTP values to avoid management decisions based on inflated hypothetical data.