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Psychological prices at retail gasoline stations: the policies of 0-, 5-, and 9-ending prices

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  • Nicolas Huck
  • Régis Y. Chenavaz
  • Stanko Dimitrov

Abstract

Psychological prices are known to impact consumer behaviour and to depend on retailers’ characteristics. Less understood is last digit pricing, especially in the context of retail gasoline stations. We study price endings in the French gasoline market with 11,471 gas stations and 4,775,300 prices for oil companies, supermarkets, and independent retailers during five years. Raw data suggest that 0-ending prices are more expensive. Yet, these last digit effects do not survive careful scrutiny focusing on the individual behaviour/distribution of each gas station. Plus, 9-, 0-, and 5-ending prices are over-represented. Our evidence better informs administrative authorities investigating market irregularities and consumers interested in better deals.

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  • Nicolas Huck & Régis Y. Chenavaz & Stanko Dimitrov, 2021. "Psychological prices at retail gasoline stations: the policies of 0-, 5-, and 9-ending prices," Applied Economics, Taylor & Francis Journals, vol. 53(48), pages 5584-5598, October.
    • Handle: RePEc:taf:applec:v:53:y:2021:i:48:p:5584-5598
    DOI: 10.1080/00036846.2021.1925627
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    Cited by:

    1. Jinyoung Yu & Young‐Chul Kim & Doojin Ryu, 2024. "Left‐digit biases: Individual and institutional investors," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 44(3), pages 518-532, March.

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