Price Endings, Left-Digit Effects, and Choice

Kenneth C. Manning and David E. Sprott

Journal of Consumer Research, 2009, vol. 36, issue 2, 328 - 335

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.

Date: 2009
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