Stokey, 1979
Windows
A monopolist selling a durable good can segment buyers by releasing it in stages. High-value buyers go first and pay more.
WtW · The pricing principle
Willingness to Wait
Time is the price your customers already quote you.
Every market holds people who need it now and people who will happily wait. We help firms measure that difference and build it into a product menu, so each group pays a fair price for the speed it values.
- Core idea
- Delay is a price customers pay in time
- Mechanism
- A menu where buyers sort themselves
- Typical wait
- Hours to months, set by the market
- Engagements
- 8–12 weeks, fixed scope
The theory
Willingness to wait is willingness to pay, expressed in hours.
Photographs via Unsplash, free to use under the Unsplash Licence.
A seller rarely knows what any single buyer would pay. Asking does not work, because buyers have every reason to understate. What a seller can observe is behaviour, and one of the most reliable signals is how buyers react to delay. People who value a product highly tend to value it most right away. People who value it less are usually more flexible about when they get it.
That correlation lets a firm offer the same core product at two moments and two prices. The early version carries a premium. The later version is cheaper, and the wait itself does the screening. Nobody is asked to declare their type. Each buyer picks the option that suits them, and in picking, reveals how much they value the product.
Economists call this intertemporal price discrimination, and it sits inside the wider theory of screening and versioning. The arithmetic is simple. A buyer with value v and a cost of waiting c per week takes the later option when the discount covers the cost of the delay:
choose Standard ⇔ Pexpress − Pstandard ≥ c × D
max premium = curgent × D // set by the impatient group's cost of delay
max standard price = vpatient − cpatient × D
max premium = curgent × D // set by the impatient group's cost of delay
max standard price = vpatient − cpatient × D
The design problem is choosing the delay D. Too short, and urgent buyers drift down to the cheaper tier. Too long, and patient buyers stop buying altogether. Between those limits there is usually a wait that earns more than any single price could, and costs the firm almost nothing to provide.
There is one serious threat to the strategy. Ronald Coase argued in 1972 that a seller who keeps cutting prices over time teaches buyers to hold out, until the premium disappears. Firms that use willingness to wait well protect against this with fixed release windows, credible commitments and a cheaper tier that is genuinely different from the premium one.
Four ideas we build on
The research behind the practice
Our work rests on a well-tested body of economics. These are the four results we return to most often.
Coase, 1972
Credibility
If buyers expect prices to fall, they wait. The premium tier holds only if the seller commits to the schedule in advance.
Deneckere & McAfee, 1996
Damaged goods
Firms sometimes add delay to an otherwise identical product on purpose, because the slower version widens the market.
Mussa & Rosen, 1978
Self-selection
A well-built menu prices each option so that every buyer prefers the one meant for them. Delay is one quality dimension among several.
How the menu sorts a market
One product, two moments, two prices
Buyers arrive mixed. The menu separates them without a single question, because the wait costs each group a different amount.
The model · try it on your market
How much is the wait worth?
Describe two customer groups. The model sets the best express and standard prices for the delay you choose, then compares that menu with the best single price. Figures are per 1,000 customers and use example values to start.
Revenue per 1,000 customers, by length of wait
Two-tier menuBest single price
- Two-tier revenue
- £0
- Single price
- £0
- Uplift
- 0%
Assumptions: the urgent group values the product at least as much as the patient group and minds delay more. The firm's cost of serving later is treated as zero. Real engagements estimate these inputs from your transaction data, surveys and controlled tests.
Applications
Where markets already price the wait
The principle shows up wherever a product can be delivered sooner or later. These patterns are public and well documented. Our work is fitting the right one to your business.
| Sector | Premium tier | Patient tier | Typical wait | What protects the premium |
|---|---|---|---|---|
| Publishing | Hardback on release day | Paperback edition | 6–12 months | A published paperback date that doesn't move |
| Film & streaming | Cinema or premium rental | Subscription library | 30–90 days | Release windows agreed in contracts |
| Logistics | Next-day delivery | Economy shipping | 3–7 days | A real gap in service level |
| Air travel | Flexible fares booked late | Advance-purchase fares | Weeks of commitment | Fare rules, minimum stays, change fees |
| Attractions | Skip-the-line passes | General admission queue | 30–120 minutes | Capped pass numbers |
| Software & data | Real-time feeds, early access | Delayed data, later releases | 15 min – 1 release | Clear feature or latency gaps |
| Professional services | Priority turnaround | Standard queue | 48 h – 3 weeks | Published service levels |
“The wait is a product feature. Design it with the same care as anything else you sell.”INTERVAL & CO. · OPERATING PRINCIPLE
Method
A ten-week engagement
Each phase ends with something you can use, whether or not you continue to the next.
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Measure patience
We read your order history for timing signals: lead times, cart abandonment after delivery quotes, and how buyers respond to past promotions.
Delivers: patience profile by segment
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Find the correlation
The strategy works only if your high-value buyers are also your impatient ones. We test that with conjoint surveys before anything is built.
Delivers: go / no-go memo
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Design the menu
We set the tiers, the length of the wait and the prices, and check that every group still prefers the option intended for it.
Delivers: priced tier architecture
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Build the fence
A premium survives only if the cheaper tier stays genuinely slower. We specify the release rules and commitments that stop it eroding.
Delivers: fencing and commitment policy
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Test in market
A controlled rollout across regions or cohorts measures take-up and revenue against a holdout group, before the full launch.
Delivers: test readout and launch plan
Responsible practice
Profit that customers can see is fair
The cheaper tier must be a real option
We don't recommend waits designed to frustrate. The standard tier should be something a reasonable customer is glad to choose.
Terms stated up front
Release dates and service levels are published before purchase, so every buyer knows exactly what the price buys.
No delay on essentials
We decline work that would hold back healthcare, safety or other essential services to sell faster access.
Checked against the law
Every menu is reviewed against consumer protection and competition rules in each market where it will run.
Engage us
Start with a two-week diagnostic
Send us a short description of your product and how it is sold today. We'll tell you whether your market rewards a wait, and how large the opportunity looks.
Diagnostic2 weeks · fixed fee
Full engagement10 weeks · five phases
Retained advisoryQuarterly pricing reviews