Willingness‐to‐pay estimation with choice‐based conjoint analysis: Addressing extreme response behavior with individually adapted designs

The increasing consideration of behavioral aspects in operations management models has prompted greater use of choice‐based conjoint (CBC) studies in operations research. Such studies can elicit consumers’ willingness to pay (WTP), a core input for many optimization models. However, optimization models can yield valid results only if consumers’ WTP is estimated accurately. A simulation study and two field studies show that extreme response behavior in CBC studies, such that consumers always or never choose the no‐purchase option, harms the validity of WTP estimates. Reporting the share of consumers who always and never select the no‐purchase option allows for detecting extreme response behavior. This study suggests an individually adapted design that avoids extreme response behavior and thus significantly improves WTP estimation accuracy.