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Do consumers prefer round prices? Evidence from pay-what-you-want decisions and self-pumped gasoline purchases

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  • Lynn, Michael
  • Flynn, Sean Masaki
  • Helion, Chelsea

Abstract

Consumers selected round prices and/or sales-totals at greater than chance levels across two different pay-what-you-want situations and one self-pumped gasoline purchase. The differences among these situations suggest that the tendency to select round prices/sales-totals reflects a subjective preference (or liking) for round prices and not a variety of other potential explanatory processes. Discussion focuses on possible economic consequences of this revealed preference for round prices as well as directions for future research.

Suggested Citation

  • Lynn, Michael & Flynn, Sean Masaki & Helion, Chelsea, 2013. "Do consumers prefer round prices? Evidence from pay-what-you-want decisions and self-pumped gasoline purchases," Journal of Economic Psychology, Elsevier, vol. 36(C), pages 96-102.
    • Handle: RePEc:eee:joepsy:v:36:y:2013:i:c:p:96-102
    DOI: 10.1016/j.joep.2013.01.010
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    Cited by:

    1. Kunter Gunasti & Timucin Ozcan, 2019. "The role of scale-induced round numbers and goal specificity on goal accomplishment perceptions," Marketing Letters, Springer, vol. 30(2), pages 207-217, June.
    2. Bayer, Ya'akov M. & Ruffle, Bradley J. & Shtudiner, Zeev & Zultan, Ro'i, 2018. "Costly superstitious beliefs: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 69(C), pages 30-43.
    3. Meng, Charlotte C., 2023. "The price paid: Heuristic thinking and biased reference points in the housing market," Journal of Urban Economics, Elsevier, vol. 134(C).
    4. Marcial López-Pastor & Jesús García-Madariaga & Joaquín Sánchez & Jose Figueiredo, 2020. "Demand Impact for Prices Ending with “9” and “0” in Online and Offline Consumer Goods Retail Trade Channels," International Review of Management and Marketing, Econjournals, vol. 10(6), pages 58-78.
    5. Jeong, Ji Youn & Crompton, John L., 2017. "The use of odd-ending numbers in the pricing of five tourism services in three different cultures," Tourism Management, Elsevier, vol. 62(C), pages 135-146.
    6. Andreas Kramer, 2016. "Using Experimental Survey Designs to Support Pricing Decisions," Business and Management Horizons, Macrothink Institute, vol. 4(1), pages 22-38, June.
    7. Anna Kukla-Gryz & Katarzyna Zagórska, 2017. "The strength of the anchoring effect on Pay What You Want payments: Evidence from a vignette experiment," Working Papers 2017-14, Faculty of Economic Sciences, University of Warsaw.
    8. ChihChien Chen & YangSu Chen, 2017. "The impacts of different types of cuisines and restaurants on gratuities," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(2), pages 154-173, April.
    9. Hackl, Franz & Kummer, Michael E. & Winter-Ebmer, Rudolf, 2014. "99 Cent: Price points in e-commerce," Information Economics and Policy, Elsevier, vol. 26(C), pages 12-27.
    10. Gerpott Torsten J., 2016. "A review of the empirical literature on Pay-What-You-Want price setting," Management & Marketing, Sciendo, vol. 11(4), pages 566-596, December.
    11. Kukla-Gryz Anna & Zagórska Katarzyna, 2017. "The effects of individual internal versus external reference prices on consumer decisions for pay-what-you-want payments," Central European Economic Journal, Sciendo, vol. 4(51), pages 1-17, December.
    12. Rabbanee, Fazlul K. & Roy, Rajat & Sharma, Piyush, 2022. "Contextual differences in the moderating effects of price consciousness and social desirability in pay-what-you-want (PWYW) pricing," Journal of Business Research, Elsevier, vol. 141(C), pages 13-25.
    13. Jan Wieseke & Anika Kolberg & Laura Marie Schons, 2016. "Life could be so easy: the convenience effect of round price endings," Journal of the Academy of Marketing Science, Springer, vol. 44(4), pages 474-494, July.
    14. Petrowsky, Hannes M. & Schweinsberg, Martin & Seitz, Lennart & Funk, Burkhardt & Loschelder, David D., 2023. "Deal or no deal? How round vs precise percentage offers and price-ending mimicry affect impasse risk in over 25 million eBay negotiations," Journal of Economic Psychology, Elsevier, vol. 94(C).
    15. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    16. Damon Alexander & Christopher Boone & Michael Lynnb, 2021. "The Effects of Tip Recommendations on Customer Tipping, Satisfaction, Repatronage, and Spending," Management Science, INFORMS, vol. 67(1), pages 146-165, January.
    17. Fay, Scott & Lee, Seung Hwan (Shawn), 2015. "The role of customer expectations in name-your-own-price markets," Journal of Business Research, Elsevier, vol. 68(3), pages 675-683.

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    More about this item

    Keywords

    Consumer preference; Pricing; Round numbers;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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