Direct evidence of ending-digit drop-off in price information processing

George Y. Bizer, Robert M. Schindler

Research output: Contribution to journalReview articlepeer-review

66 Scopus citations

Abstract

Research has suggested that pricing products at one cent below a whole number (e.g., $4.99 instead of $5.00) can be an effective method for increasing purchases. Although many reasons for this have been suggested, a commonly proposed explanation is that consumers tend to drop off, or pay less attention to, the rightmost two digits. This drop-off mechanism has garnered much indirect support, but only limited research has been conducted to directly test it. In this study, respondents provided estimates of how many products they could purchase for $73. Analyses indicated that respondents thought they could buy significantly more products priced with 99 endings than products with comparable 00-ending prices. Follow-up analyses showed that (a) errors made by respondents showed a pattern consistent with a drop-off mechanism, and (b) motivation to carefully provide quantity estimates moderated the effect. The study therefore provides rare direct evidence that the drop-off mechanism may contribute to the effectiveness of 9-ending pricing.

Original languageEnglish (US)
Pages (from-to)771-783
Number of pages13
JournalPsychology and Marketing
Volume22
Issue number10
DOIs
StatePublished - Oct 2005

All Science Journal Classification (ASJC) codes

  • Applied Psychology
  • Marketing

Fingerprint

Dive into the research topics of 'Direct evidence of ending-digit drop-off in price information processing'. Together they form a unique fingerprint.

Cite this