Penny Wise and Pound Foolish: The Left-Digit Effect in Price Cognition
AbstractThrough five experiments, we provide a cognitive account of when and why nine-ending prices are perceived to be smaller than a price one cent higher. First, this occurs only when the leftmost digits of the prices differ (e.g., $2.99 vs. $3.00). Second, the left-digit effect also depends on the numerical and psychological distances between the target price and a competing product's price. The closer the two prices being compared, the more likely is the left-digit effect. Third, the left-digit effect is not restricted to the domain of prices; it also manifests with other multidigit numbers. (c) 2005 by JOURNAL OF CONSUMER RESEARCH, Inc..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Consumer Research.
Volume (Year): 32 (2005)
Issue (Month): 1 (06)
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- Avichai Snir & Daniel Levy & Alex Gotler & Haipeng (Allan) Chen, 2012.
"Not All Price Endings Are Created Equal: Price Points and Asymmetric Price Rigidity,"
Working Paper Series
69_12, The Rimini Centre for Economic Analysis.
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