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Price Endings, Left-Digit Effects, and Choice

Author

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  • Kenneth C. Manning
  • David E. Sprott
Abstract
Past research has found that changes in price endings can result in "left-digit effects" whereby the magnitude of an item's price relative to the price of a reference product is influenced by the leftmost digits of both prices. We extend this work by investigating the impact of changes in price endings and associated leftmost price digits on choice. Findings indicate that assigning different combinations of price endings to two products (e.g., $2.00 and $2.99 vs. $1.99 and $3.00 vs. $2.00 and $3.00) can shift choice share toward the lower- or higher-priced alternative. We also find that changes between just-below (e.g., $29.99 and $39.99) and round (e.g., $30.00 and $40.00) pricing affect choice, with just-below pricing shifting share toward lower-priced alternatives. The latter effects are found to be moderated by price level and shopping goals. A three-path mediation model reveals the processes underlying the influence of price endings on choice.

Suggested Citation

  • Kenneth C. Manning & David E. Sprott, 2009. "Price Endings, Left-Digit Effects, and Choice," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 36(2), pages 328-335.
    • Handle: RePEc:oup:jconrs:doi:10.1086/597215
    DOI: 10.1086/597215
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    Cited by:

    1. Robert M. Schindler & Mathew S. Isaac & Rebecca Jen-Hui Wang, 2023. "Strategic use of just-below numbers in packaged-foods calorie information," Marketing Letters, Springer, vol. 34(2), pages 237-250, June.
    2. Chen, Tao, 2018. "Round-number biases and informed trading in global markets," Journal of Business Research, Elsevier, vol. 92(C), pages 105-117.
    3. Fraser-Mackenzie, P. & Sung, M. & Johnson, J.E.V., 2015. "The prospect of a perfect ending: Loss aversion and the round-number bias," Organizational Behavior and Human Decision Processes, Elsevier, vol. 131(C), pages 67-80.
    4. Carver, James R. & Padgett, Daniel T., 2012. "Product Category Pricing and Future Price Attractiveness: 99-Ending Pricing in a Memory-Based Context," Journal of Retailing, Elsevier, vol. 88(4), pages 497-511.
    5. Lingjiang Lora Tu & Chris Pullig, 2018. "Penny wise and pound foolish? How thinking style affects price cognition," Marketing Letters, Springer, vol. 29(2), pages 261-273, June.
    6. Sören Köcher & Markus Husemann-Kopetzky & Marie Schirmbeck & Melina Hess & Fabian Gmeindl & Samuel Hess, 2024. "A Conceptual replication of the differential price framing effect in the field," Marketing Letters, Springer, vol. 35(1), pages 159-170, March.
    7. Chenavaz, Régis & Drouard, Joeffrey & Escobar, Octavio R. & Karoubi, Bruno, 2018. "Convenience pricing in online retailing: Evidence from Amazon.com," Economic Modelling, Elsevier, vol. 70(C), pages 127-139.
    8. Snir, Avichai & Levy, Daniel, 2021. "If You Think 9-Ending Prices Are Low, Think Again," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1 (Forthc).
    9. David Bürgin & Robert Wilken, 2022. "Increasing Consumers’ Purchase Intentions Toward Fair-Trade Products Through Partitioned Pricing," Journal of Business Ethics, Springer, vol. 181(4), pages 1015-1040, December.
    10. Snir, Avichai & Chen, Haipeng (Allan) & Levy, Daniel, 2022. "Zero-Ending Prices, Cognitive Convenience, and Price Rigidity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 203, pages 519-542.
    11. Macé, Sandrine, 2012. "The Impact and Determinants of Nine-Ending Pricing in Grocery Retailing," Journal of Retailing, Elsevier, vol. 88(1), pages 115-130.
    12. Gould, Stephen & Goldsmith, Emily & Lee, Michael, 2020. "The choice polarity effect: An investigation of evolutionary-based trait handedness and perceived magnitudes on laterally displayed choices," Journal of Business Research, Elsevier, vol. 120(C), pages 627-637.
    13. Santana, Shelle & Thomas, Manoj & Morwitz, Vicki G., 2020. "The Role of Numbers in the Customer Journey," Journal of Retailing, Elsevier, vol. 96(1), pages 138-154.
    14. Bruno Karoubi & R駩s Chenavaz, 2015. "Prices for cash and cash for prices? Theory and evidence on convenient pricing," Applied Economics, Taylor & Francis Journals, vol. 47(38), pages 4102-4115, August.
    15. Bhatt, Siddharth & Pai, Dinesh R. & DelVecchio, Devon, 2023. "The dark side of multiunit discounts: Multiunit discounts reduce rest of basket revenue," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    16. Jeong, Ji Youn & Crompton, John L., 2018. "Do subjects from high and low context cultures attribute different meanings to tourism services with 9-ending prices?," Tourism Management, Elsevier, vol. 64(C), pages 110-118.
    17. Bogomolova, Svetlana & Oppewal, Harmen & Cohen, Justin & Yao, Jun, 2020. "How the layout of a unit price label affects eye-movements and product choice: An eye-tracking investigation," Journal of Business Research, Elsevier, vol. 111(C), pages 102-116.
    18. 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.
    19. Wright, Scott A. & Schultz, Ainslie E., 2022. "Too gritty to indulge: Grit and indulgent food choices," Journal of Business Research, Elsevier, vol. 139(C), pages 173-183.
    20. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    21. Jungsil Choi & Kiljae Lee & Yong-Yeon Ji, 2012. "What type of framing message is more appropriate with nine-ending pricing?," Marketing Letters, Springer, vol. 23(3), pages 603-614, September.
    22. Chien-Huang Lin & Jyh-Wen Wang, 2017. "Distortion of price discount perceptions through the left-digit effect," Marketing Letters, Springer, vol. 28(1), pages 99-112, March.
    23. Hiroaki Sakaguchi & John Gathergood & Neil Stewart, 2020. "How Preferences for Round Numbers Affect Choices: Stickiness and Jumpiness in Credit Card Payments," Discussion Papers 2020-20, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    24. Yao, Jun & Oppewal, Harmen, 2016. "Unit Pricing Increases Price Sensitivity Even When Products are of Identical Size," Journal of Retailing, Elsevier, vol. 92(1), pages 109-121.

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