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Left-Digit Bias at Lyft

Author

Listed:
  • John A List
  • Ian Muirex
  • Devin Pope
  • Gregory Sun

Abstract

Left-digit bias (or 99-cent pricing) has been discussed extensively in economics, psychology, and marketing. Despite this, we show that the rideshare company, Lyft, was not using a 99-cent pricing strategy prior to our study. Based on observational data from over 600 million Lyft sessions followed by a field experiment conducted with 21 million Lyft passengers, we provide evidence of large discontinuities in demand at dollar values. Approximately half of the downward slope of the demand curve occurs discontinuously as the price of a ride drops below a dollar value (e.g. $14.00 to $13.99). If our short-run estimates persist in the longer run, we calculate that Lyft could increase its profits by roughly $160M per year by employing a left-digit bias pricing strategy. Our results showcase the robustness of an important behavioral bias for a large, modern company and its persistence in a highly competitive market.

Suggested Citation

  • John A List & Ian Muirex & Devin Pope & Gregory Sun, 2023. "Left-Digit Bias at Lyft," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(6), pages 3186-3237.
    • Handle: RePEc:oup:restud:v:90:y:2023:i:6:p:3186-3237.
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    File URL: http://hdl.handle.net/10.1093/restud/rdad014
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    Cited by:

    1. Cho, Hyunkuk, 2024. "Left-digit bias in self-reported height," Economics & Human Biology, Elsevier, vol. 54(C).
    2. Gilles Grolleau & Naoufel Mzoughi & Christoph S. Weber, 2025. "Longer vs. shorter denominations of unemployment and inflation rates: an experimental survey," Economics and Business Letters, Oviedo University Press, vol. 14(2), pages 95-105.
    3. Andor, Mark Andreas & Götte, Lorenz & Price, Michael Keith & Schulze Tilling, Anna & Tomberg, Lukas, 2023. "Differences in how and why social comparisons and real-time feedback impact resource use: Evidence from a field experiment," Ruhr Economic Papers 1059, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Breunig, Robert & Deutscher, Nathan & Hamilton, Steven, 2024. "Rounded Up: Using round numbers to identify tax evasion," Journal of Public Economics, Elsevier, vol. 238(C).
    5. Mark A. Andor & Lorenz Goette & Michael K. Price & Anna Schulze-Tilling & Lukas Tomberg, 2025. "Real-Time Feedback and Social Comparison Reports Impact Resource Use and Welfare: Evidence From a Field Experiment," CRC TR 224 Discussion Paper Series crctr224_2025_651, University of Bonn and University of Mannheim, Germany.

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