Reservation price

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Reservation price

The price below or above which a seller or purchaser is unwilling to go.

Reservation Price

The price for an asset above which a buyer is not willing to pay and/or below which a seller is not will to take. This tension between the buyer wanting a low price and the seller wanting a high price helps create the market price for the asset. The reservation price is important in microeconomics, where it is used to help determine an asset's equilibrium price. See also: Reservation wage.
References in periodicals archive ?
It said overall selling prices had remained stable in the first half, but that private reservation prices had risen by 5% to an average PS179,199.
They argued that the distribution of reservation prices consists of asymmetry and variation, and correlation alone is not sufficient to represent heterogeneity.
Taha added that reservation prices for hotels in Cairo, Aswan and Luxor were expected to drop by 20 per cent, while prices at hotels in Hurghada and Sharm Al-Sheikh were not expected to change from that of the previous year.
These win-win relationships result in a larger negotiation space, determined by the buyer's and seller's reservation prices (Walton and McKersie 1965; Raiffa 1982; White, Valley, Bazerman, Neale and Peck 1994) that is called the bargaining zone.
the quantity transacted is exogenously determined) bilateral bargaining model in the presence of unobserved reservation prices and potentially time-varying bargaining power.
These estimates are intelligently adjusted to attain immediate reservation prices.
Rather than declaring their reservation prices at the outset, discovering the full contours of the bargaining range (overcoming the first obstacle), and then having it out over which of the prices they will settle on (trying to overcome the second obstacle), the processes of bargaining-range discovery and the proposal of prospective settlement prices are conducted simultaneously.
For low reservation prices firms behave as local monopolists.
Since higher-default-risk borrowers are required to pay risk premiums one way or another, one would expect that the reservation prices (or bids) for FHA and VA borrowers would likely be lower than would otherwise be the case.
Although our objective is not to forecast housing prices, we can assess the extent to which changes in mortgage rates and required returns would affect reservation prices.
Every argument will be compatible with the assumption that sellers possess the means to predict potential customers' reservation prices (5) exactly.
1) Stulz (1988), Brown (1988), Brown and Ryngaert (1992), and Bagwell (1991, 1992) discuss the effect of capital gains taxes on investors' reservation prices in responding to various types of tender offers, and conclude that taxes are likely to be a major cause of heterogeneous reservation prices.